When I first got Vista, I ran with UAC fully enabled. I did so to fully experience what users would experience when running UAC and thus, avoid being part of the problem when writing user-land code. It drove me completely bonkers.
When I switched to 64-bit Vista, I decided enough was enough and I turned it off altogether, but I always felt a little guilty. I tried the "elevate without prompting" approach, but it felt like cheating - although I guess it's good that you still get file and registry virtualization. Plus, it seems a great many of MS bloggers insist on keeping UAC turned on for the same reasons that I originally left it on.
Now however, I think I've found the best of both worlds. I leave UAC on, set to "Prompt for consent", but I turn OFF the Secure Desktop. It saves just a fraction of a second when UAC prompts appear, but it makes all the difference. And it's much less visually distracting. Give it a shot if you hate UAC (who doesn't?).
Run the Local Security Policy application and change the "Local Policies\Security Options\User Account Control: Switch to the secure desktop when prompting for elevation" policy to "Disabled".