Wouldn't Haddin be a better batsmen of the two, and I have a real strong feeling that if fit Lee will play in the first test.
Haddin has the better Test record, but Watson has the better First class record, ODI record, T20 record and the better technique. It's also felt that Watson has more potential. If he focused solely on his batting instead of trying to be an allrounder, it's quite likely he'd become a fine batsman in his own right.
Watson #6, Haddin #7 also suits the batting styles of each. Watson won't flay attacks as menacingly as Haddin will, so Haddin can afford to take the lower spot and it won't matter so much if he is left with the tail because he's quite attacking, whereas Watson is only moderately attacking.
Haddin should definitely bat above McDonald though if he happens to play (please no...:upray)
This is easily the worst Australia squad to come here for 30 years, though, regardless.
I think Ricky Ponting and the Aussies will be quite happy if they keep getting talked down for the next 2 months.