Since Virtumart is not yet upgraded for Joomla 1.7 is there any way to automate the configuration of new sites. Have you considered creating a addon, to do this that is not dependent on any shopping cart software, as it does not look like virtuemart will be ready for Joomla 1.7 soon.

You can create website from the front-end but for the moment this is still "free website" creation from the front-end.

We thing develop another "bridge for XYZ" that should work with Joomla 1.7 but it is not yet available.
We have ideas but not yet had the time to redevelop all our extension for Joomla 1.6 and 1.7. This is something that we will do but we can not comit on a date.

If you want that very quickly, you can initiate the project if you buy our billable support.