You have to pass keyword "default" to indicate that function shoul use default value for that parameter.

>Ok, here's the part of BOL about CREATE FUNCTION:
>
>   CREATE FUNCTION [ owner_name. ] function_name
>   ( [ { @parameter_name [AS] scalar_parameter_data_type [ = default ] } [ ,...n ] ] )
>
>(Bold is my emphasis)
>
>Now, in Invoking User-Defined Functions, we can find this:
>
>   When you invoke a function, you must supply argument values for all of the parameters...
>
>Now the question: what's the point of specifying a default if you've got to supply the argument in the first place? I wanted to have an optional argument to a function I'm creating, so based on the CREATE FUNCTION help, I assumed it was possible, but looks like it isn't.