Few years back, I was working in development center. Every developer wanted to have full system rights to install everything they want. End result was lots of system failures, viruses, Trojans & what not on the network.
Giving users limited access to system by making sure all application functionality work was a difficult task. At that time I read few articles on the topic. (Read my comments & input on the topic at the bottom of these articles)
Keys to the Kingdom – http://mcpmag.com/articles/2003/10/28/keys-to-the-kingdom.aspx
Local Admin Rights, Right or Wrong – http://mcpmag.com/articles/2003/11/11/local-admin-rights-right-or-wrong.aspx
Since then Microsoft has done a lot of development in making sure applications work with limited-user access. Least-Privilege to User Accounts (LUA) has benefits of increased security, manageability, productivity, reduced cost & reduced privacy.
Check these articles for more details on the topic.