Suggesting you setup the core as a router and automatically setting up the core as a router are two different things. LMCE does not give the user/admin control over many of the networking and configuration options. (Maybe this will be added in the future). But that is not the major problem, as IPTables should not prohibit most Intranet traffic.
However, conf file clobbering is just... WRONG. Most installs backup the conf file, merge in configuration changes, and then write the new file (or, if they don't merge, they tell the user about it and tell them where the backup is). As for those .pbackup files, that's a backup ONLY from the Pluto install on. In my case, my conf files had already been clobbered (by what, I have no clue).
conf file clobbering = BAD, even if it is supposed to be a clean install.
If LMCE is to really take off, you have to assume that not all users are going to have 100% fresh systems. For instance: before I do anything on my box, I need Samba up because it serves files and printers to the rest of my network, and after I install LMCE, I expect my shares to be intact.
This is definitely something that needs to be changed in the future if LMCE ever expects to reach a larger, less technically competent, consumer base.
To reiterate and repeat: CONF clobbering is BAD PRACTICE.