As the admin of my laptop, I have it installed to the typical location C:\Program Files (x86)\Ableton\Live 8\ and updates run fine, etc..
The ProgramData folder is just so computers with multiple users, educational setups, etc can all update without the interaction of an administrator.
Actually, multi-user scenarios are exactly the reason why you shouldn't
install applications into ProgramData. If you're the IT guy who manages computers in a music lab, you don't want
your users updating or modifying your applications in any way. You want to know that the computer's going to behave the same way for every person who has to use it. Placing applications in ProgramData creates more problems for the administrators of multi-user systems than it solves.
The ProgramData folder is for system-wide application settings, not program binaries. Individual user accounts have hidden AppData folders for user-specific application settings. The Public pseudo account used for shared documents and a few system-wide settings doesn't have an AppData folder, since no one actually logs into that account. Instead, Windows offers the ProgramData folder for applications to store settings that apply to all users on the system. So ProgramData is just the public version of AppData. It is not a UAC-free Program Files.