Windows 7: Mounting virtual disk triggers UAC

Hi,

I'm running Daemon Tools Lite, and have a conceptual problem. If I create a virtual disk, and then mount an .iso image of an OS on it, and then click on setup.exe to install the virtual OS, Windows 7 triggers a UAC warning.

I don't understand why anything happening on the virtual disk would be subject to the host Windows 7's settings. It makes me fear that I'm not actually virtual, though the drive path certainly looked virtual.

Would someone explain what's going on here? Thanks.

edit: Actually, I should have titled this, Executing virtual image triggers UAC.

Your post isn't entirely clear - are you running setup.exe inside a virtual machine, and the UAC prompt is happening in the parent OS when you execute setup.exe from within the VM? Otherwise, if you're running a setup program from within the parent OS (regardless of where you're going to apply it), you're going to get a UAC prompt. I can't imagine you're doing that though, as there would be little reason to do so. Perhaps you could clarify the exact steps and provide some screenshots.

Yes, the former. I understand that anything done within the host OS will trigger UAC. But I thought that what happens in virtualland stays in virtualland. So I'm in the virtual window, I click on setup.exe, and the host OS triggers a UAC. At least that's what I think happened.