It has been a very interesting discussion. I am willing to concede that, at the very least, fretting is as likely to cause headset damage as brinelling. We don't have any clear cut evidence to the contrary, just as we don't have any evidence the balls aren't denting the races through plastic deformation. But in the end, it isn't the mechanism of damage that is of concern. It is the cause. An overtightened headset puts a preload on the bearings that, whether due to denting or fretting wear, accelerates the wear or denting tremendously. The point loads are so great from the ball bearings that every bit of torque beyond no play is magnified. If fretting due to displaced lubrication is the cause, it happens more with a tight headset. Same if denting is the cause. My partner reminded me that the instructions that came with a Campy headset state that the handlebar stem must be inserted and tightened down for proper headset adjustment, because it expands the steerer, which makes it contract in length, which means that with the stem out of the frame, the headset will be ever so slightly loose, possibly imperceptibly so. So the personwho adjusts his headset until it is tight, and backs it off until itisn't, runs a greater risk of damage than the person who starts outwith it loose, and gradually takes play out until there is none, and nopreload either. It is a fine line, but this is the only way you canfeel proper adjustment.
Regarding small frames vs large frames, while the fork in the large frame may be under more load due to the size and weight of the rider, I think it is true that, all other things being equal, a longer steerer flexes less than a short one. The small frame has a much shorter head tube, with the same length fork blades, which means there is much greater leverage on the lower unit. The typical small frame also has a shallower head angle, which exacerbates this leverage. So the answer to that is, a heavier rider on a small frame will damage a headset easier than a lighter rider on a large frame. In the middle, you can't say. The flexing of the fork puts increased loads on the front and back of the headset, but it is the back that receives the most damage, ostensibly from the lateral backwards pressure delivered by every bump you go over.
Jan Heine's observation in the recent BQ about riders in the Portland technical trials who could not ride uphill on a bumpy section easily because they had tires that were too skinny and too high pressure, bears on this discussion. The reason they are hard to ride uphill on the bumpy section is, they have more resistance due to less compliance. We have all experienced this, when your bike slows down over cobblestones or washboard. This is the same mechanism, on a finer scale, that makes a headset either wear or dent, whichever they do. Extra pressure on the races due to extreme fork flex.
I've just posted some pictures of a damaged headset here http://www.flickr.com/
thesis - antithesis - synthesis. It's how new ideas evolve. Thanks to those who have contributed.