It took the browser through some interesting turns. What I noticed in this prank is the fact that once you accept ONE UAC prompt in IE7 it disables the protection for subsequent browsing until you completely restart IE7. This would make it easy for malware to install itself without alerting you (too much) that it is doing so.
Other thing is still evident that a less educated user still could get spyware/malware into the system via IE7.
Well M$ I think it is bug that need to fix;) I hope not many others left hidden.
The article took IE7 from this;

to this with much more in between.

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