Wiring 1.0.1 ATMega2560 + EthernetShield build error

My system is Windows 7, freshly installed with Arduino 1.0.1 and Visual Micro

Have you tried compiling this using the IDE? If not, I'd suggest that YOU are the one that needs to.

If it compiles in the IDE, and not in Visual Micro, then the problem is with Visual Micro, not the Arduino tool chain.