Well, just dropping my $0.02-worth here....
I have never, EVER trusted Micro$oft to know what I want it to do to my machine, ESPECIALLY without specific information about every pending change. (Their continuous "Windows needs to update" message is something I completely ignore, and shows how lazy they are and careless in truly keeping their user's systems PROPERLY up-to-date and safe.... Yes they've messed my machine up several too many times....)
Hence, since I therefore have my Windows Update setting set to "Currently not monitored" and my UAC setting to "Off"," and I check for updates on a quarterly schedule, I have no idea even how the crazy UAC rules even affect the crazier Windows Update actions and permissions.
FYI: I, too, am running Win7 x64, BTW.
Also, here are my Security settings:
Network
firewall: On
Windows Update: Currently not monitored
Virus
protection: Currently not monitored
Spyware and unwanted software protection: Currently not monitored
Internet
security settings: OK
User Account Control: Off (UAC will never notify.)
Network Access Protection: Off
Another note: Micro$oft can't seem to even be consistent in the capitalization of their settings phrases, either! (See underlined words above! ... or their counterparts, take your pick!)