So you need a timespan that represents the count down value. Then that value - the stopwatch elapsed equals how long remaining. That looks like this, without a check for expiration, which you should be able to figure out.

Code:
    Dim sw As New Stopwatch
    Dim countdown As TimeSpan

    Private Sub Timer1_Tick(sender As Object, e As EventArgs) Handles Timer1.Tick
        Dim ts As TimeSpan = countdown - sw.Elapsed
        Label1.Text = String.Format("{0:00}:{1:00}:{2:00}", ts.Hours, ts.Minutes, ts.Seconds)
    End Sub

    Private Sub Button1_Click(sender As Object, e As EventArgs) Handles Button1.Click
        Button1.Enabled = False
        Timer1.Interval = 100
        Timer1.Start()
        countdown = TimeSpan.FromMinutes(45) 'set the countdown
        sw.Start()
    End Sub
BTW - You and paul should check the difference in the string formats.