Click Add or Remove User Accounts link under User Accounts and Family Safety
In the Manage Accounts dialog box, click Create a New Account
Enter the account name, select the type of account...
Administrator - This gives the person the power to create and change accounts and install programs.
Standard user - The person with this type of account can't do the same thing as an Administrator can.
Click Create Account and then close the Control Panel
Note: Once an account it created you can then go into that account and make changes like adding a password or change it from one type (e.g. Admin or Standard) of account to another.
I know what this dose sort of. However. I am not quite sure I understand why we would want or need to do this. Can you please explain more to us please?
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This is for when you have more than one person using the same computer. You can set up separate account for each person so they can set their personal preferences that will probably be different from everyone else.
It also limits who has Admin powers... e.g. your kids. You'd want to create a separate (limited) account for them and save the Admin account for yourself.