Important installation note for people wanting to play with CardSpace: CardSpace only works when installed on an NTFS filesystem. If you are planning on setting up the July CTP and playing with CardSpace, make sure your C: drive is not FAT32. Here is the error you will see if you try to run CardSpace and you are not using NTFS (note the bolded sentence):

The description for Event ID ( 102 ) in Source ( Microsoft.InfoCards.Diagnostics 3.0.0.0 ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. You may be able to use the /AUXSOURCE= flag to retrieve this description; see Help and Support for details. The following information is part of the event: The Windows CardSpace service cannot be started on this file system., at System.ServiceModel.Diagnostics.ExceptionUtility.TraceFailFast(String message, EventLogger logger)
at System.ServiceModel.Diagnostics.ExceptionUtility.TraceFailFast(String message)
at Microsoft.InfoCards.Diagnostics.DiagnosticUtility.FailFast(String message)
at Microsoft.InfoCards.Diagnostics.InfoCardTrace.FailFast(String message)
at Microsoft.InfoCards.InfoCardService.FailFastIfNoFileSystemSecurity()
at Microsoft.InfoCards.InfoCardService..ctor()
at wmain()
at _wmainCRTStartup()

I have no idea what would happen if you installed the .Net Framework 3.0 on a FAT32 filesystem first, and then converted that filesystem to NTFS. If anyone happens to try this, drop me a comment and let me know how it goes.

I also do not know if the incompatibility rests with only CardSpace, with all of WCF, or with all of .NET Framework 3.0. Any and all information updates would be welcome.

Ah the trials and tribulations of the intrepid early adopter! How boring would life be if it all just worked? That being said, I do hope that they will put some kind of FAT32 test/warning into the next version of the installation script, otherwise there could be some long-term bad karma accumulation :-)