Hi
The problem with Visual Studio on Windows 7 is not related to WPF. WPF should work on Windows 7 with DisplayLink (and always has).
I suspect the issue you may be seeing is using Visual Studio in Windows Basic mode (no aero effects). Windows system updates can prevent our basic mode video implementation from working, and we need to update our drivers to make it work again. This happened during August 2010 (preventing video from working in basic mode and affecting Visual Studio in the way you describe).
We have made the necessary changes in v5.5 software release. Could you try downloading v5.5 software release from our
website, rebooting and then trying again and see if you still have the problem?
Thanks
Wim