I spent some time fixing/improving my Arduino IDE setup this evening.
1) Fixed slow "Tools" menu.
There is an open issue with the Arduino IDE that it locks up while enumerating Serial ports on Windows.
Thankfully there is a fix in this thread. I downloaded rxtxSerial-2.2_fixed_2009-03-17.rar and extracted rxtxSerial.dll to replace the existing file in my Arduino IDE program folder. This fix makes an immediate difference - the IDE launches faster, loads sketches faster and I can use the tools menu faster.
2) Updated ATtiny core.
The core available on this site (http://code.google.com/p/arduino-tiny/) seems to be Arduino 1.0 compatible.
3) Working Arduino IDE 1.0 ArduinoISP sketch
A user on the Arduino forums sent me a patched ArduinoISP sketch that is now checked into my github here. This fixes the fact that the Example ArduinoISP sketch included with the 1.0 IDE doesn't actually work.
Combining all of these fixes I am now able to program my ATtiny85 sensor node from the 1.0 IDE.
I also spent some time this evening trying to get the VirtualWire library working on my ATtiny85. Unfortunately, I got totally stuck on this and have posted details of my progress to the Arduino forums.