That is the default setting for LAME with VBR encoding... if you want to reset to the out of the box state, then delete this registry key: HKEY_LOCAL_MACHINE\Software\Unforeseen Developments\MO3
Anywho... if it is not displaying the supported sample rates, then there was a problem calibrating. Did you put the LAME.EXE in the same directory as MO3.EXE is in? Also, are you using LAME 3.70?