I have just managed to boot from a Windows 7 installed on a new .VHD, and I installed it right from the Windows 7 DVD. We can do a similar process with “Windows Server 2008 R2 (beta)” installed on a .VHD file, as well. If you’d use Virtual PC 2007 to install the Virtual image, the produced .VHD wouldn’t work when trying to boot from the .VHD.
A.- Creating the .VHD file and Windows 7 installation on that .VHD file
1. Boot the machine using the Windows 7 DVD
2. Choose Windows Repair
3. start CMD
4. Run Diskpart
5. Type: Create vdisk file=c:\Windows7Build7000.vhd maximum=40000
6. Type: select vdisk file=c:\Windows7Build7000.vhd
7. Type: attach vdisk (in previous Betas, it was ‘surface’ instead of ‘attach’)
8. Type: ‘exit’ (you exit Windows Repair, but Do Not Reboot)
9. Install Windows 7 to this attached .VHD (From Win7 installation, you now have to ‘see’ another Hard Drive, you’ll need to create a partition & format it, first. You might get an error/warning saying that your computer hardware might not support this disk, just ignore it..).
10. Reboot, and you got it!!!!