Lucky for you, I recently got Windows 7 at work and at home, and have started using it as my primary OS. (I am in the process of compiling and testing SGDK2 on Windows 7 for the first time, but haven't spent much time on it lately. Still don't know how well games work in 64-bit Windows 7, but hopefully later tonight.)
I created a very simple application on Windows 7 using Visual C# 2010 Express, and made it target .NET 2.0. When I call Application.UserAppDataPath, I get the value "C:\Users\Ben\AppData\Roaming\Microsoft\WindowsFormsApplication1\1.0.0.0". Also, I have learned that even applications that *do* look in C:\Documents and Settings\ will find what they are looking for on Windows 7 (even though the directory doesn't exist) because it simulates the path for backwards compatibility, it seems. If you type the address into the address bar of Windows Explorer in Windows 7, it will show you a "fake" listing of files from another directory (like the one I listed above).
But that should not be an issue because I can't even make UserAppDataPath return Documents and Settings on .NET 2.0 on my system. Where did you see that it is not supported in Windows 7?