Microsoft designed WSS and MOSS to run on Windows Server 2003 or Windows Sever 2008. This restriction is enforced by the installer. The creative people at Bamboo Solutions have created a installer wrapper for WSS and MOSS which runs on Windows Vista x32 and x64 or Windows XP x64. The full instructions for this install are found here.
The limitations appear to be:
1) It is not supported by Microsoft. This means some things may not actually work correctly. As I pointed out in my article about WindowsIdentity impersonation, some operating system API calls are only supported in Windows Server 2003 and Windows Server 2008. So spurious errors may occur.
2) IIS on Windows Vista Home Premium only supports Basic Authentication.
3) The installer supports only install in farm (not single server) mode as web front end.
4) Because it is in farm mode, an external SQLServer must be provided.
I tried this out at home and it works. There are some curious features to my home installation. First I do not have a domain controller so the entire system runs on local users and basic authentication. I am an administrator in both SQLServer and on my machine so I just used myself as the Farm Administrator process users. The result is that everything I do in SharePoint is shown as being done by System Account (SHAREPOINT/system). I was able to add other local users to my Document Sharing site though. I would suggest that anyone considering doing this for either development or a home office, create separate local users as suggested in the Office SharePoint Server security account requirements.
The other obvious problem is using SQLExpress for the database. Since SharePoint stores document blobs, after a while the Document Sharing site is likely to be full.
Overall though, I think I prefer my Windows Server 2008 x32 box for development. With MSDN membership there is no reason not to go with Windows Server 2008, SQLServer 2008, MOSS 2007 SP1, VS 2008, and VSeWSS 1.3. But if you have a zero budget operation, this looks like it might be a good way to enter SharePoint development.