It just doesn't currently work on Vista, even Vista RC2. I'm guessing the various product teams inside Microsoft have only recently been enjoying having a finalized Vista API set and now the can actually start ensuring their various products work correctly.

If it where a choice between getting XNA running under Vista or liberating the latest Orcas release from its Virtual PC - XP prison then I'd choose the later. Kind of hard to debug native Vista APIs with Orcas at the moment...