Can you please explain the term "Priviledged" account as opposed to Administrator? Is this Windows XP Pro/Vista specific? Using Windows XP Home, I was not previously aware of any step between regular user and admin user.
On Windows in its default configuration, any account that is in the Administrators group has all the same powers as if logged on as Administrator, for most things that matter. We say that the account is "an" administrator, as opposed to "the" Administrator.
The way an administrator gets the right to do things is via privileges. There are a whole bunch of those privileges and they can be assigned one-by-one to regular users, if you don't want to make the regular user a member of the Administrators group. Members of the Administrator group get all or most of them by default. In Windows "Home" versions Microsoft makes it hard to use this fine-grained approach to privileges, so there is only a distinction between Administrators and regular users. But even on Pro machines, it's rare for privileges to be assigned individually; most people just run as an administrator.
Note that running as an administrator generally means you can do anything you want to the machine, from installing network drivers to disabling AV software and joining the PC to a botnet. A small program that you accidentally click on from a web site or email can do this in a few seconds, before you notice it has run. So when you run as an administrator your machine is much easier to compromise.