That's right the unit must be in service by Dec 31, 2010. I'm rushing to get a mini-split heat pump installed by the deadline. Some parts I need to complete the job are on back order at the wholesaler.
I heard a report that the IRS has sent roughly 30 million in tax refund checks to criminals in prison. They have alot of time on their hands to do things like file phoney tax returns. If the IRS can't get a handle on that, I think you can safely apply for your tax credit even if it isn't fully installed by 12/31.