Hi guys, I have a question regarding Metasploit. 

I'm happy with the process for running Metasploit against a remote host and with using the msfpayload function of Metasploit but...

Is it possible to create an executable using Metasploit that will exploit a vulnerabilty on the local machine that is running in the context of a restricted user to raise the priviledges of the user or execute any other payload that is specified such as create an Administrative Account or install a VNC server and connect back to another host?

Maybe i have missed something, but to run a payload that was created with msfpayload it seems to asume that the user/victim already has administrative rights on the target PC.

You're referring to privilege escalation on a machine that you already have some level of access to?  There are a lot of tools you can use for that, but metasploit sure wouldn't be my first choice.  They plan to built it out in the future to do this via the meterpreter tool, but it still doesn't seem to be the best option.  Hell, you could just pick the relevant exploit out of:

http://www.milw0rm.com/local.php

You can use Metasploit's meterpreter payload to either drop the machines NTLM hashes then crack them or upload a local exploit and execute it.

I posted about meterpreter recently on my personal blog.

http://www.ethicalhack3r.co.uk