Check out the comments on Miha's post about visual inheritance, there is more info down there.
Unfortunately there are no good news there and future or our main project at work doesn't look very bright in VS2005. We use visual inheritance on almost every form and I can't really imagine developing without. I remember how we tested VI in VS2003 when it came out and kept fingers crossed. It worked and we grabbed it. We learned few drawbacks during the years, but nothing that would really indicate we are using a feature that will not be supported in just a couple of years.
And no, Sahils workaround will not work for us. It would be too much to code by hand.