I have installed WSS and on top of it MOSS 2007 on my Vista laptop.
every thing is OK... until I dont see 'Create or extend web applicatin' link under the application management tab. I checked every other permissions, local admins, farm admins etc. No luck.
I checked quickly web and found out that the solution is very simple.
'Add your site to the local intranet site'. - If you are using IE.
And i dont think you have any issues if you use other browsers.