This looks promising for running fastboot:
I used a portable colinux distro before and it worked quite well. It lets you launch ubuntu inside 32-bit XP (or other windows) and runs NOT in a VM, but side-by-side with windows. I do not know how well USB support is, but I plan to test it. I am downloading it from sourceforge now.
How it works is that the linux kernel runs as a windows device driver, and all of its device drivers are stubs that request service from windows drivers. It uses the windows desktop, so linux and windows apps can run side-by-side on the desktop too.
The nice thing about this portable distro is that you just run it in windows when you want it -- no need to install it.
I will keep you posted how well fastboot runs in this portable colinux environment. I plan to run it in a 32-bit VirtualBox WinXP VM (my host PC is 64-bit linux).