We are running 2010 alongside 2007 using App-V (SoftGrid). 2007 is locally installed and 2010 sequenced.

We encountered an error during install on the sequencing machine. Turns out that you have to remove 2007 before you can install 2010, in spite of the fact that you are supposed to be able to do a side by side install.

The error in question is:
"Error 1407, setup cannot get the value names for the registry key...."

As stated above, uninstall 2007, install 2010 and it works. You can then run them both on client machines, one locally installed, one virtualised.