So with the new release of our SDK and VS Tools and the recent release of Windows 7 Beta, some folks may have tried to run one on the other...
Well, in case you have and are wondering why some parts don't work, or in case you haven't and were thinking of trying to, or haven't and were thinking you might look good in mauve stretchy velour pants (like I did that one time at last years MSFT Christmas party), I have some info for you.
First, there is an issue with running the SDK (not the tools) on Windows 7 Beta. Essentially, you can install the SDK, but when you try to run your project on the local developer fabric, it will fall over.
Second, we're actively working on the problem, both us and the Windows 7 team, so as soon as we work out a solution we'll get it out to folks.
So what do you do in the meantime? My personal approach was to download the VSTS 2008 SP1/TFS SP1 free trial VPC (it expires on the 31st of December, 2009, which should give us enough time to sort the issue out ;)), install the SDK on that, then run that inside Virtual PC 2007 SP1.
Update: So as usual, I rushed through my post, made a bunch of bad assumptions, and ended up costing some folks a lot of wasted time... I'm sooo sorry! What happened? Well, to get past the Win7/Windows Azure SDK issue, I run a VPC environment on my laptop for demos. I actually got this VPC from an internal location, and thought it was VSTS 2008 running on Windows Server 2003. I installed the SDK, it runs great, so I then posted the above, pointing folks to a publicly available VPC that I thought/assumed was the same as mine. :( It wasn't. Turns out the one I have is actually Windows Server 2008, not Windows Server 2003. And as I'm not able to post the one I have, I have a work around.
Step 1. Grab a base VHD from here, either the Vista or Windows Server 2008 one.
Step 2. Download and install one of the VS 2008 trials.
Step 3. Install the Windows Azure SDK and VS Tools for Windows Azure on that.
Again, so sorry for the muck-up.