I saw this post on dailydave today and laughed to myself. I thought with all the effort MS had put into the security of Vista something this obvious would not work. George Ou actually tried it and surprise, surprise it works. Sometimes you can’t see the trees for the forest (I did change this saying to fit this situation).
The amount of damage that can be done with this is uncertain, but I would wager its not high. It’s a pretty nifty hack though.