>I thought part of the point of UAC was to virtualize many of the filesystem parts of being an administrator so you could install programs without actually being administrator
No, it's the other way around. UAC removes lots of privileges of an administrator from the administrator until they explicitly approve them.
So, if a normal user tries to install some system software, they won't be allowed to. If an administrator tries to install it, they will be prompted 'are you sure this is OK?' first.
It's essentially Microsoft's way around the problem of lots of Windows users always running as administrator. Now, they can run as administrator and be reasonably safe, as long as they don't blindly accept any UAC prompts...