Some installations of Windows 7 are set to allow the default user to log in automatically when the computer starts. However, requesting users to enter their login credentials when the computer starts is highly recommended as it is a security measure. Conversely, when the computer is located in physically secure location, automatic logon might be preferred. Remember, that anyone with physical access to the computer can start the system and access your data if user login is set to auto!
UAC is a Windows 7 in-built tool that protects your system. It alerts you when you are executing some task that requires administrator privileges! For example, if you open a word document and a UAC prompt is displayed, then the document may be some sort of malware as it is requesting administrative privileges when in fact it should not!
UAC runs only with user accounts that have administrator privileges while it does not affect normal users. Normal users without admin rights are by default blocked from running elevated tasks. Do not get mislead by this statement, as there are applications that run with elevated permissions even when normal users are logged on. Therefore, UAC is a security-warning tool that makes you aware of the potential risks.