The VBL suggestion sounds like a sweaty solution unless it's real cold. I would only resort to a VBL if the dew point were going to occur inside my insulation. More breathable bivy alternatives are a much better option for most 3-season campers in Minnesota.
Generally speaking, poncho-tarps are not the best as rainwear or as tarps. But the right ones are pretty good at both. I use an Integral Designs poncho-tarp (wearing it to dry after an afternoon shower in my avatar pic). Other options mentioned are great options too. The primary drawback of the poncho-tarp is the dance required to transition from rainwear to shelter (or vice versus) during a precipitation event without soaking everything else you brought along.
Regarding bivy condensation - all bivies condensate sometimes. But not all are created equal.
* Cheap bivies made from silnylon do not breathe, thus condensating badly, but resist external moisture fairly well.
* Moderately priced Goretex or similar bivies breathe a little, condensate a fair amount, and resist external moisture very well.
* Expensive eVENT and Pertex Endurance bivies breathe well, condensate a lot less, and resist external moisture very well.
* Moderate to expensive Pertex Quantum and similar bivies breathe superbly, condensate the least, but are at best water resistant.
Bottom line, you get what you pay for. If limiting condensation is a primary concern, you will have to pay more (eVENT or Endurance), or carry a full coverage tarp (Quantum).