Just received a copy of a good Exchange 2007 and Powershell book:
‘Professional Windows PowerShell for Exchange Server 2007 Service Pack 1’ (Programmer to Programme) by Joezer Cookey-Gam (Author), Brendan Keane (Author), Jeffrey Rosen (Author), Jonathan Runyon (Author), Joel Stidley (Author)
Starts off pretty basic but does go into the structure of quite complex powershell scripts. ..definitely worth a read.
What is the easiest way to set up Exchange environment for Development? Is there a microsoft provided VHD for the same?
It's easy to use Virtual PC (http://www.microsoft.com/windows/products/winfamily/virtualpc/default.mspx) or Virtual Server (http://www.microsoft.com/windowsserversystem/virtualserver/default.aspx) to set up your own. Or you could try downloading this trial VHD (http://www.microsoft.com/downloads/details.aspx?FamilyID=692a6e3c-81c9-4d8a-93fa-266d651735dc&displaylang=en)...?