CRM 4.0 FAQ > Workflow - Web UI (3 entries)
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Yes for on-premise and partner hosted (if they allow it) you can create custom activities using Windows Workflow Foundation and have it show up in the list just like the ones ...
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No if you need access to the pre-image you need to use a workflow defined in Visual Studio or write a plug-in.
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CRM 4 allows workflows to be triggered on events for organization owned entities http://crm.davidyack.com/journal/2007/12/6/organization-custom-entities-and-workflow.html