Right click the setup on the exchange DVD and set the compatibility to Vista SP2. Odd, but works.

http://www.kapie.com/blog/CommentView,guid,f492b5db-c84f-4949-ad6b-82d458558936.aspx

Problem:
An Exchange 2007 server on which an address list service is active cannot be found.

Solution:
START the Microsoft Exchange System Attendant service from Services.msc

http://social.technet.microsoft.com/Forums/en/exchangesvradmin/thread/bc1cef27-78ee-49d4-87eb-21f6f2e09079