A snapshot is a way to “freeze” a virtual machine so that you can reverse back to a previous state. As an example, if you want to install a servicepack or a hotfix, it could be a very good idea to do a snapshot before. In case of a big “oops” you can revert back. If all works nicely you can remove the snapshot file. In Hyper-V the standard way to run a virtual machine is to use Virtual Hard Disks (VHD) and there are different kinds of VHD files, we have fixed size disks and dynamic disk. Fixed size consumes the size that the file have, dynamic files expand them self’s while you store data. That means that for performance you always use fixed size disk, also to not dynamic disks, dynamic disk are very good for LAB and/or servers with low disk IO load.