As I was writing some SharePoint management powershell scripts (to be posted be later) to generate .NET wrappers for each SharePoint WebService I noticed that my script was not creating the workflow.asmx wrapper. Maybe the script is wrong? Nope, looks good there. Maybe I have a messed WSS install, so I fire up good old SharePoint designer to make sure workflows can be created in application sites. Yup, those work. Now since i have always had a MOSS installation i never really questioned which web services only available in MOSS and not is WSS (silly me!).
After doing some research (and looking at the MSDN docs) it does appear that the workflow.asmx web service is only available in MOSS installs and even though you can create workflow's via SharePoint Designer wss does not include a web service for interacting with workflow's installed on a site.
Here is a good MSDN doc for SharePoint (If your doing any sharepoint web service development you probably already have this bookmarked)