Finally, we got through the support services processes at Microsoft and got a solution!
First, Microsoft stated this to be a bug. It is a minor bug, because there is a good workaround, so it may take some longer time, until this bug will be fixed (the support technician said something with next service pack oder next version (!)).
But now for the problem.
The reaseon
Let's take a look at the CAML code from my question:
<Method ID='1' Cmd='Update'>
<Field Name='ID'>1</Field>
<Field Name='myDummyPropertyField'>NewValue</Field>
</Method>
For any reason the Workflow Manager does not work with the ID, we entered in the second line. Strange, all other SharePoint commands are working with the ID, but not the Workflow Manager. The Workflow Manager works with the "fully qualified" document name. So, because we had no clue and didn't entered any fully qualified document name, the Workflow Manager defaults to the name of the current document library. And now the error message begins to make sense:
The object specified does not belong to a list.
Of course, the object (document library) does not belong to a list, it IS the list.
The solution
We have to add one more line to our CAML Query:
<Field Name='FileRef'>/sites/mySite/myDocLib/myFolder/myDocument.txt</Field>
The FileRef passes the fully qualified document name to the Workflow Manager, which - now totally happy - starts the workflow of the item.
Be careful, you have to include the full absolute server path, omitting your server name (found for example in ServerRelativePath property of your SPItem).
Full working CAML Query:
<Method ID='1' Cmd='Update'>
<Field Name='ID'>1</Field>
<Field Name='FileRef'>/sites/mySite/myDocLib/myFolder/myDocument.txt</Field>
<Field Name='myDummyPropertyField'>NewValue</Field>
</Method>
The future
Perhaps this undocumented behaviour will be fixed in one of the upcoming service packs, perhaps not. Microsoft Support apologized and is going to release an MSDN Article on this topic. For the next month I hope this article on stackoverflow will help developers in the same situation.
Thanks for reading!
I'm shortly going to be in a similar scenario and have been looking into this issue ahead of time since I heard of this issue in blog write-ups. You can apparently still develop under 32bit and then move it to the 64bit server.
It seems that the issue is truly in the Sharepoint Extensions...so if you don't use them (ie. SharePoint 2007 Sequential Workflow or SharePoint 2007 State Machine Workflow projects) and just create a workflow project it appears to have better success for some.(look in the comments to the posting)
Here's the tracked bug at Microsoft Connect, some VS team members provided a "work around" which is basically what I first mentioned.
Bottom line, crummy handling by Microsoft considering this is their "Showpiece" and they are pushing people to 64bit platform. In another two weeks I should be feeling this, if I come up with anything more I'll post back. Good Luck!
Best Answer
If you don't have SharePoint installed, the free WSS 3.0 version is available for download from Microsoft. Follow these steps to install in a single server environment. It will install a basic version of SQL Server. Note this is suitable for prototyping only, not a production deployment, due to restrictions in the basic install.
Then use SharePoint Designer to create the workflows, free from Microsoft. There is no need for any other software. This allows you to configure workflow against a particular list in your SharePoint site with a wizard-like interface. See this topic on Office Online for more information.
If you need to develop a reusable workflow that can be deployed to many different sites or a production SharePoint instance then this is a much larger time investment. Start by reading one of the many other questions on this site for "getting started with SharePoint" that will give resources to how the product works. Be warned: there's a reasonable learning curve. Once you have a solid understanding, you could follow it up with a book such as Professional SharePoint 2007 Workflow Programming (first search result).