Wanted to let you know that we've just released Drupal 7 for Windows+IIS+MSSQL out on http://microsoft.com/web/drupal This distro, built by Commerce Guys comes pre-configured with the Drupal SQL Server Module. When you install this, our installer will check your system and install MS SQL Express and PHP if you need it automatically.
If you don't have IIS on your Windows machine clicking install will install Drupal 7 with MSSQL using a new web dev tool we released last week called WebMatrix. (htttp://microsoft.com/web/webmatrix). If you have IIS on your dev machine you will have a choice to install D7 to IIS or to WebMatrix. (I recommend trying WebMatrix). WebMatrix integrates our Web App Gallery with a lightweight dev environment and our hosting gallery where we have deals on hosting on Windows and IIS.
WebMatrix works on XPsp3 and up so should be something everyone can try.
Hope you guys like this. Let me know if you have any feedback. We're scoping out v2 for WebMatrix right now.