MS won’t let you do it, doesn’t mean you can’t.
We use Dell XPS1330 laptops in our environment so these bad-boys come with Nvidia 8400GT cards.
When installing Windows7 beta (build 7000) to a system with an Nvidia graphics card, the default graphics driver installs. To update this, Nvidia recommend you update the driver via Windows Update (http://www.nvidia.com/object/windows_7.html) this installs the 179.23 driver
The problem with this driver is that it corrupts the display (not sure if it’s restricted to single or multiple displays; we use multiple).
To fix this annoying problem, there are more recent drivers available (179.28) from Nvidia’s site (http://www.nvidia.com/Download/index.aspx?lang=en-us), that resolve the issue. I have Win7 x64, so used the Vista x64 ones.
The advantage to downloading the Nvidia ones is that they also install Cuda/Physx.