I have a C++ project (some sort of a console 32-bit appplication) developed in VS2010, which builds just fine on my PC (Windows 7 32-bit). My PC has Microsoft SDK 7.0A installed
Also you can add this node & value to registry (correct with your install dirs & win 32/64 version).
---begin .reg file---
Windows Registry Editor Version 5.00
[HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\VisualStudio\10.0\Setup\VS]
"ProductDir"="C:\\Program Files (x86)\\Microsoft Visual Studio 10.0\\"
---end .reg file---
because of MSBuild script %ProgramFiles(x86)%\MSBuild\Microsoft.Cpp\v4.0\Platforms\Win32\PlatformToolsets\Windows7.1SDK\Microsoft.Cpp.Win32.Windows7.1SDK.props" search for VSInstallDir.