Posted June 08, 2011

Virtual store is used when an old app (as in pre-Vista) would need to write data to a folder where the user running it does not have permission to write to (for example a non-admin account trying to run data in Program Files); the write will get redirected to C:\Users\Username\AppData\Local\VirtualStore\{program path here} (same thing for registry entries).
Now, virtualization is enabled only for 32bit interactive processes and administrator writable file/folder and registry keys. This means that even disabling UAC, the data may still be or not be written in the Virtual Store, depending on how that software is written and the permissions required by it.
My advice would be to keep UAC enabled if you're running Windows 7 or Vista SP1 (they fixed a lot of the UAC annoyances in that service pack) because it does provide an additional layer of security.
The short gist of UAC is that it prevents every elevated launch and asks the user for permission, which means that you always know if something is trying to hijack your session and do something nasty. With UAC off that elevation flag is ignored (well, the ERROR_ELEVATION_REQUIRED error code is ignored) and elevation is granted automatically for most requests (there are some exceptions but are mostly related to the kernel so even malware doesn't go that deep).
Post edited June 08, 2011 by AndrewC