I read in a few places that MVC requires Windows Server 2008 for full support. Can the same be achieved on a Vista Ultimate dev machine or will some things be missing?
If you have worked with MVC, have you had trouble finding relatively inexpensive hosting for Windows Server 2008? Though hosting is not as big a concern for me right (I know I will find some) as needing a dev machine with 2008 Server.
The MVC bits "require" IIS7 running in Integrated mode more than they require Windows 2008. As IIS7 is present on Vista you're pretty much good to go, provided you configure it right.
(I know my host, DiscountASP.NET (insert referral code here obviously) have IIS7 and the MVC bits all ready to go)
ASP.NET MVC plays nicely with Server 2008, but this is not required. The main crux to not using Server 2008 (IIS 7) is that you will need some form of url rewriter, otherwise Server 2003 (IIS 6) will not know that you are trying to execute an asp.net app.
What you can do is use the mod_rewrite isapirewrite with IIS 6 and you are good to go.
Steve Sanderson wrote a good article here that details how to implement several options, with mod-rewrite being the 'cleanest' solution.
What do you consider "full support"?
Phil Haack has a very good post on getting MVC up and running on IIS6 - and there are a number of other questions around here on running MVC on a non-IIS7/win2k8 set-up - you certainly don't need to use something like ISAPI-rewrite or other things - it seems rather excessive to have two routing engines in your set-up - and if you're looking for a "relatively inexpensive host" are they going to have/allow something like ISAPI-Rewrite installed and available?
As for development, I've had no problems running developer environments on both XP Professional and Vista Home Premium (which comes with IIS7 if you add the bits yourself from Windows Components).