Is acceptance the same as approval?

I found myself in a very tricky situation recently. I was in the company of someone whose lifestyle I have big moral questions about but as a christian I want to love them, affirm their humanity and show grace and mercy to them at all times. Fair enough. But it became apparent that while they were very appreciative of my acceptance of them, they also wanted my approval of how they were conducting their lives.
Can you accept someone, warts and all, and at the same time make it clear that you do not approve of their lifestyle? I think it's hard but necessary. Hard for them not to think that you are being judgemental and hard for you to maintain a healthy balance.
I rationalize it like this. I am accepted by God in Christ, He loves me, affirms me but doesn't always approve of the things I do. Do I know he loves me and am I secure in him? Yes but I also know that God makes a difference between the two.
We need to do the same. Unconditional love whatever someone may do or whatever way they behave. But our approval of their lifestyle needs to be regulated by God's Word. It will confuse them even more if we pretend the way they live doesn't matter.