There was an update to Visual Studio 2005 published 2 years ago that fixed many UAC problems on Vista, and that same update fixes the same problems on Windows 7.
It is not a critical update so you wouldn’t get it automatically, and it was not included with VS2005 SP1. They’re not actively publicizing this update now b/c they just want everyone to go to VS2008. So chances are you don't have it.
Explanation at http://msdn.microsoft.com/en-us/vstudio/aa948853.aspx?lcid=1033
Download at http://www.microsoft.com/downloads/details.aspx?FamilyID=90e2942d-3ad1-4873-a2ee-4acc0aace5b6&displaylang=en
Here's what that update fixes, when running Visual Studio in normal user mode with UAC turned on:
- Drag/drop files from an explorer window
- Launching VS (as a normal user) by launching shortcuts to solutions/projects or associated file types
- DLL/EXE registrations still fail (rightly so, since those are system-level changes.)
If you're running VS as an administrator, the window is still locked down to drag/drop and shortcuts, and DLL/EXE registrations work correctly without having to completely turn off UAC.
Note: VS will still warn you about administrator mode when you launch it, but now you can probably ignore that warning permanently.