LocalSystem Account. The name of this account is NT Authority\SYSTEM. It is a built-in Windows Account and is the most powerful account which has unrestricted access to all local system resources, it is more powerful than any admin account. It is a member of the Windows Administrator group on the local computer, and is therefore a member of the SQL Server sysadmin fixed server role. Most of the System level services and some other 3rd party services run in this account. Other accounts do not have enough access rights for some services.
Windows 7 in addition to LocalSystem has two more accounts. LocalService and NetworkService. These two accounts have less privileges.
Here is a Microsoft Site that explains in more detail the Service User Accounts.