Every wallet handles the situation differently, so you'll get better responses if you specify MultiBit in your Subject line.
I've used MultiBit as an example but to be honest I'd be interested in knowing how the different wallets handle it differently.
Like Danny I am not up with MultiBit but basically it has only two choices wrt change.
1) Create a new address and send it there (which is how the Satoshi client behaves)
2) Send the change back to one of the existing addresses (I guess this should be easily verifiable by experiment).
Ah OK, that makes sense - thanks. So am I right in assuming that irrespective of what choice the wallet makes, in terms of my example above it takes the entire balance from all the addresses in the wallet, and then puts the change either in a new address or one of the existing ones? So every time you send some bitcoins, all the remaining coins from various addresses in that wallet end up in one address?