I was super happy when the \"Graphics Debugger\" feature was announced for Visual Studio 11, I immediately attempted to get it working on various projects I had, unfortunate
Based on the information you've provided, the tool is crashing in D3D11CreateDeviceAndSwapChain because the abstraction layer isn't able to satisfy the necessary Direct3D extensions during rendering. This is corroborated by the error message you've cited, insofar as the Direct3D calls that are being requested are not supported by your current machine.
MSDN provides a help article on this scenario, walking you through using the standard tools to debug this process. In particular, while you have probably already considered it,dxdiag can assist your debugging the current running extensions on your system for Windows 7 or Windows 8 Consumer Preview. You should also be able to save a crash dump when Visual Studio 11 crashes for later debugging, which should illuminate which process call failed.
Please do so and, if possible, update this question with the results. That should illuminate the API call your system requires so we can resolve this issue.