I've recently had a problem running a wcf msmq host in windows 7, specifically to debug a new service. Turns out this was purely down to the installation of msmq. Unlike Windows XP, Windows 7 includes msmq out of the box, therefore generally a fresh windows install is not on a company domain at this point, and thats the problem. To create and manage a public queue on a domain, the msmq service needs to be integrated into AD (just making sure the check box is ticked isn't enough).
So if you are having trouble, goto windows components, uninstall msmq, check your logged into the domain and install again. final step is to make sure that the application in question has permissions to manage msmq, in vs debug, just run as administrator, otherwise the service user (not tested this yet though) should be fine.
