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From Micropedia
User Account Control (UAC) is a technology and security infrastructure introduced with Microsoft's Windows Vista operating system. It aims to improve the security of Windows by limiting applications to standard user privileges until an administrator authorizes an increase in privilege level. In this way, only applications that the user trusts receive higher privileges, and malware is kept from receiving the privileges necessary to wreak havoc on the operating system.
In other words, with UAC a user may have administrator privileges, but an application that that user runs does not unless it is approved beforehand or the user explicitly authorizes it to have higher privileges.
UAC will usually prompt the user for additional privileges automatically, but the user can also right-click a program and click "Run as administrator".
