VseWSS 1.3 and Windows 2008 r2 does not support workflow

Question

I recently upgraded my laptop to Windows 7 (32 bit), but wanted to do sharepoint development, which although I know Sharepoint can be coaxed to run on Windows 7, I couldn't get workflow operating (index services, blah, blah), plus I had problems getting the VseWSS 1.3 to operate correctly.

Instead I took advantage of the new 'boot from VHD' to build a Windows 2008 r2 image, and installed everything on there. Perfect.

However, When I come to try to build workflow solutions with VS2008, I get problems. The templates do not operate saying that they require Sharepoint 32 bit.

Hunting around the web it seems that this is a know limitation, and that the advise is to develop on 32 bit. However, now that I have Winndows 7, Windows 2008 r2 installed what O/S can I develop on. r2 is 64bt only, Windows 7 doesn't support Sharepoint, and I cant install Windows 2008 (32 bit) as I don't think Virtual PC runs on 2007.

Anyone got any suggestions on how to do Sharepoint Worklow development on this configuration ? I'd be happy to go with manual VS2008 development and packaging (without VseWSS),but I seem to be hitting problems with this as well.