Windows 7 has .NET 3.5 included, ensure it is enabled. It is better to use Windows XP 32 bit, because it needs less resources, so it will run better when you are on a Virtual Machine.
However, there is a problem with VirtualBox which you can attempt resolving using VC++ 2008. I wrote about this, but I am not sure in which thread.
But you can use VMWare Workstation Player (Free) and you should not have issues..
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