Simple collect in store / pick up module, since even in Magento 1.7 this isn't working.
Simply copy over the files for the module, clear cache and the new shipping method should appear in the admin.
The files from the design are not necessary to copy over, you can do this in your locale folder of your theme. What I'm basically doing there is changing the label that says 'Ship to this address' into 'Ship to this address / Collect in store' so users are aware of the possibility and don't need a shipping address for it.
Currently only tested with Onepage Checkout.