lower? rubbish... you can only run 16 or 32 bit code on intel x86 compatible CPUs.
anyway, 16 bit DOS apps were only supported in systems prior to and including XP 32 bit. In XP x64, windows server, and vista, they are not supporred. If you actually bothered to read the HCL and Release Notes before installing vista 64 bit, you would be aware of that...
And yes, here are the downsides of turning off UAC:
If you disable UAC, you also disable UPI. UPI (user priviledge isolation) uses the new system of Integrity Levels (an extension on the existing ACL framework) which aims to stop lower privileged applications communicating with more priviledged ones. With UAC disabled, its easier for a malicious program running under limited priviledges to communicate with another which is running with more rights and enabled it to perform "shatter attacks" using message injection.
Also, this means that Internet Explorers Protected Mode (where it runs IE under a low privilege and in a sandbox ) .is disabled, which facilitates further security flaws, particuarly those caused by malicious addins like spyware toolbars.
And yes, File & Registry Virtualization (responsible for doing handy things like redirecting requests for \\Documents and Settings\ to \Users im vista as well as other folders and registry keys) is only active when UAC is turned on. For that reason many older programs will not work correctly when UAC is off
UACs token system also means the system is more secure in the event that the shell is maliously modified as most of the userland runs under a low priviledge mode. Disbling UAC also disables secure desktop which again further increases the risk of attack from a malicously modified shell or logon window.
The solution is NOT to disable UAC, but to go into group polcicy and change the policy for UAC prompts for administrators (Admin Approval Mode) from the default setting of "'Prompt for consent" to dont prompt. This keeps most of the underlying functionality, but gets rid of the majority of the prompts.