Can you develop applications for CRM 2011 using Visual Studio 2010 and Windows XP? Yes, but you will have to cheat a little bit π
CRM 2010 is base on Windows Indentity Framework (WIF), which is not supported by XP. One way around is to deploy the following assemblies into the GAC of the development machine:
* Microsoft.IdentityModel.dll
* Microsoft.IdentityModel.resources.dll
* Microsoft.IdentityModel.WindowsTokenService.dll
* Microsoft.IdentityModel.WindowsTokenService.resources.dll
Those assemblies are the core of WIF and the ones that are needed by CRM 2011 libraries. You can download them from here.