You CAN have LCR enabled with DPM sp1 and Exchange 2007, just a simple registry change and a service restart is all that is needed.
You need to add the EnableVssWriter key as a DWORD with a value of 0 (NULL) to the Registry in HKLM/Software/Microsoft/Exchange/Replay/Parameters
After setting this key you need to restart the Exchange Replication Service to activate that setting, thats it!
