Hello,

This is incorrect. Virtualization is enabled for all users as long as UAC is
turned on. Remember, with UAC turned on, programs that are ran from inside
of an Administrator account actually run as a "standard user", unless they
ask for administrator privileges through a consent dialog ("Windows needs
your permission to continue").

Since Virtualization is designed to "fix" programs that are not designed for
Vista, these types of programs will never ask for administrator permission
(sine they would have to have been designed for Vista to do so), so they
will never automatically receive admin power - they will always run as a
standard user - and this is why Virtualization will kick in regardless of
the type of user.

If any program that does not have administrator power and was not designed
for Vista attempts to write or change certain folder locations and/or
registry settings that are "off-limits" to that program, such as Program
Files, Windows, and HKEY_LOCAL_USERS, and UAC is turned on, Virtualization
will make the program think that the operation was successful, while Windows
silently redirects the changes to the user-specific Virtual Store. That
program, when accessing that location again, will see the "virtualized" data
instead of the original data, which has not been changed.

This feature is enabled to allow program that do not work correctly without
administrator privileges to work inside of Windows Vista, where they will
never have admin privileges, even if they are run by an administrator.

Take, for example, a common action of some install programs that unzip their
files to c:\ before running the setup program. This is incorrect, as they
are supposed to unzip temporary files into the user-specific temporary
folder; however, in Windows XP, as long as the user was an administrator
this would work fine, even though it is incorrect.

In Windows Vista, these types of programs should fail, even when the user is
an administrator, because they do not ask for admin privileges, and will be
denied write access to c:\.

To work around such programs, Virtualization moves these files
behind-the-scenes to the user's profile directory. The program is not
actually modifying files on drive c:\, it is actually writing to the user's
profile directory, but the programs THINKS that it is actually writing to
drive c:\.

In this way, programs that misbehave by accessing off-limits folders can
still work, without violating the integrity and security of the operating
system.

Virutal Path, or formally called "File System Visualization" is mainly for
compatibility reasons. Although Windows Vista is the coolest windows system
ever, and Microsoft is expecting it’s adopted very fast, the application
softwares are not going to be that quick. So there much be some kind of
method to ensure the existing application can work on Vista without any
changes.
So main reasons:
1)    Make Vista compatible with existing application, providing a entry path
for old guys
2)    Make sure new application must be working with UAC, keep [Windows]
[Program Files] folder clean; close the door for new guys
3)    Ultimate goal, ensure system reliability and security
And by the way, File system visualization is not really for “Standard
Users”, it’s for the application that doesn’t work with UAC, aka: provide UAC
manifest to allow Vista determine it’s running level; once you specify UAC
manifest for your APP, Visualization will be disabled.
Anyway, confusing by “Standard Users” is reasonable because once your
elevated your permission, you will have full permission to any kind of
resources, eg.c:\Program Files; then there is nothing can stop you writing
file to such location.
Last Note: Visualization is also applicable to registry entries.

File and registry virtualization helps standard users who have restricted
access to the registry and file system write to these protected areas by
creating a ‘per-user’ copy and redirecting subsequent data operations. This
means that if a regular user, or non-elevated administrator runs a program,
and that program tries to write to a folder under Program Files, those writes
are redirected to a folder to which the user has permissions to write.