redlink64, welcome to the forum! That is the first time that I've seen this sort of thing on Windows 7. I've had countless installs of 7, and never had to create an admin password, like is offered (optional) with XP & below.
The UAC does show a box just like that whenever I install or open certain apps, but the password option is not there.
I'm not going to suggest to you to disable the UAC, as it's there for your protection, but if you can't get this resolved in any other way, you may wish to consider a reinstall.
I'm also assuming that you're using the main account that you started with when you installed 7, not another account that you created with lesser privileges. If that were the case, that may prompt for a password, but I've not tried that to see.
Cat
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