I don't have a Windows 7 installation, so I can't say if there is another mechanism at work, but the obvious answer is to check if Just In Time debugging is turned on in VS (Tools/Options/Debugging/Just In Time).
I see that if you click to send the error to MS, it finally gives you a Debug option.
Also, if you go into Control Panel->Action Center->Change Action Center Settings->Problem Report Settings and change the radio selection to "Each time a problem occurs, ask me before checking for solutions" you get the Debug option right away.
One big issue I notice is that it won't debug with the debugger that is already attached. It makes you create a new debugger instance in VS 2008 and then complains there is already a debugger attached...
Hey I have checked, the option suggested by you. Thanks, But I am still not able to debug the application. This article was helpful ... Thanks. Please advice. Pooja