I ran in to the same problem posted by RobinS is the previous message, but found it to do this for the GetAll method for not only the Defect service, but also for Features, Incidents and Tasks.
The following, which were working in an application going against the 2006 SDK, seem to work fine through the current 2007 SDK beta:
projectHandler.GetAllProjects
picklistHandler.GetValuesByPickListId
typeHandler.GetPriorityTypes
DefectService.DefectHandler().GetCustomFieldValuesList
defectHandler.AddDefect(SecurityToken, defect, defect.CustomFieldValues)
attachmentHandler.AddAttachment