Blowdart posted me your comments and I thought I'd clear up a few things and calm your nerves a little 
- The PDC build really is a pre-beta. If it had reached the beta quality bar, it'd have been called a beta.
- As a pre-beta, the PDC Win7 build is missing a few things that we can't ship a beta without.
- The Win7 team takes security EXTREMELY seriously and are working hard to ensure that Win7 builds on Vista's already impressive security track record (http://blogs.technet.com/security/archive/2008/10/27/download-h1-2008-desktop-vuln-report.aspx), adding several more important security features and core OS improvements to eliminate large classes of potential vulnerabilities.
- The Win7 team are also working hard to reduce the "noise" that has annoys a lot of users; UI clutter, unnecessary icon animations, toast popping up every 2 mins, constant UAC prompting are just a few examples.
To your specific point about UAC and auto-elevation: In the PDC build, all Windows apps can auto-elevate when you set the UAC slider to the default level.
However, this won't be the case in Beta. For Beta, Windows components that can execute arbitrary code and or apps (eg CMD, CSCRIPT, WSCRIPT, PowerShell, etc) are prevented from auto-elevating. Thus, your example won't work in the beta and beyond. This has been validated on machines running more recent builds 
Significant improvements in the already effective SDL and through far more effective engineering tools, techniques and practices have resulted in the components of Windows being FAR less prone to the many forms of attack that enable arbitrary code execution. The team feel confident that these more secure Windows apps can therefore be trusted to auto-elevate in cases where elevation is required.
I don't want to sound like a corporate drone, but your feedback TRULY IS highly important to and appreciated by Microsoft. However, because the PDC build is a pre-beta "taster", issues you may experience are likely to have already been found and either fixed or in the process of being fixed. Therefore, I would encourage you to make notes of things that you think need to be adjusted, fixed, changed etc., and then when the Beta comes around, compare to see if the issue persists and if so, submit feedback.
Based upon my own experience with and observations of the Windows 7 product and process, I can openly state that I've not been THIS excited about a release of an OS from Microsoft since NT first appeared!
Not long now for the best OS beta we've ever shipped 