I have to say that Owain missed one important thing that a coalition offers.

In addition to safety, security and even some power to wield, forming a coalition means that you are not just one guild. In fact what you would be doing is building your own community of sorts.

I don't know about anyone else but the social aspect of MMO's is one of features that draws me to play them.

One guild is not only an isolated military target but also remains isolated socially in a free for all PVP setting.