It needs to run with elevated privileges in order to do this, right? So into the trash it goes. This is right up there with keyboard and mice configuration software running as daemons with administration privileges.
Yes. You don't see it often, but drives can be mounted per user session instead of at the system level.
The easiest way to see this is to use subst to map a drive and then try to navigate to that drive from a UAC-elevated command line. (You won't see the drive since it exists in a different session.)
Mapped network drives and drives shared over remote desktop are other examples of per-user mounts.