The UAC dialog does not actually appear on the users desktop. If is shown on the secure desktop (simular to the desktop you get on xp when to logon or unlock the screen) with a snapshot picture of the users real desktop shown in the background.
We have been looking into this at work, and it is pretty much impossible for anything running outside the core windows kernal to interact with this. I.e. no raising button press messages, so browsing of windows controls to find where to move the mouse, no access to the graphics even if you want to ocr the screen to fake mouse input. Essensially without installing custom graphics drivers (to capture screen) and mouse/keyboard drivers (to fake input the in not suppressed like all the hook methods) you not going to manage this (e.g. unlike xp system services with full privledges cant do it)
And quite frankly if you have installed such drivers you deserve what you get.
Now UAC as it is at the moment is a Pain in the arse (its off on by dev test machine unless i have a specific test to do) but give it a year or two for most open source & commersial application to get a new revision with proper Vista compatability (so all the pointless app dialogs stop) and i think it may work quite well at least to reduce comprimised machines.
Its major security issue is not really anything to do with the one in the artical, in short most of the prople who install Precision Time or some of the other crap they install from the web will enter there admin passord to install the app if required, because quite frankly a non skilled user if asked by their computer to do something (enter a password, click the ok button) will just do it.
Might have some impact on things like worm spread/infection rates, because a worm on a machine would almost certainly need some user input to infect out, but the people who earn money from such things will just move over to a different method.