What's the effect of .manifest file in VS project

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Windows

Visual-Studio

Win7

GUI

, +

I guess manifest file will embed in PE file by linker. I have known the manifest file can control the UAC，or prevent Application Compatible Assistant .
Today I download an old project form codeproject.com , and find a manifest file which content is:

<?xml version="1.0" encoding="UTF-8" standalone="yes"?>
<assembly xmlns="urn:schemas-microsoft-com:asm.v1" manifestVersion="1.0">
<assemblyIdentity
    version="1.0.0.0"
    processorArchitecture="X86"
    name="UICtrlDataSpy"
    type="win32"
/>
<description></description>
<dependency>
    <dependentAssembly>
        <assemblyIdentity
            type="win32"
            name="Microsoft.Windows.Common-Controls"
            version="6.0.0.0"
            processorArchitecture="X86"
            publicKeyToken="6595b64144ccf1df"
            language="*"
        />
    </dependentAssembly>
</dependency>
</assembly>

When I exclude the manifest from project and rebuild, Running it but the control in the window lost beautiful appearance under OS window7。
I'm very curious about that， and want to know the what take effect?