Windows 7 default UAC setting is less secure than Vista's UAC because it potentially allows malware to self elevate it own privileges so that it may infect your system. This of course defeats the purpose of UAC entirely. Every Win7 install I've done so far has had the slider raised to max level as it should be. After you get your programs installed and your settings tweaked, UAC barely prompts you anyway. It was a mistake by MS to allow the UAC settings to be lowered but I can understand why they chose to.
I believe you are referring to the ongoing debate between Microsoft and various reviewers/testers that differ on how UAC is designed. If I remember correctly, Microsoft's stance is that malware has to find its way onto your system, which can only happen if the user allows it. IE identifies potential hazardous applications, and gives the user a chance to deny it. A good anti-virus/security applicatoin should also be running and monitoring various processes, alerting the user and preventiing it from spreading and installing. Once a user lets malware install and run, it's very difficult to prevent it from doing what it wants. I tend to agree with this stance.