I am using Windows 7 Ultimate (upgraded from Vista-sp1 Ultimate). I have Visual Studio 2008 (with sp1) and Sql Server 2008 installed. My System Group Policy and IIS 7.0 are configured as mentioned in the Post "http://community.bamboosolutions.com/blogs/bambooteamblog/archive/2008/05/21/how-to-install-windows-sharepoint-services-3-0-sp1-on-vista