New  Windows 7 version allows you to create and manipulate virtual hard disk files (or “VHD”s) as if they were real disks.
Using .VHD files allows Virtual PC users to connect to those virtual disks to live and running OS without the need to reboot

To create virtual hard disks follow the steps below:

  • Press on Start,
  • Right click on Computer.
  • Navigate to Manage.
  • In the left hand pane, navigate to  Disk Management.
  • In the menu bar, chose Action, and then click on Create VHD.
  • Here you will be able to specfify the size and the location of the virtual hard disk file.

To attach a virtual hard disk file:

  • Click on Start
  • Right click on Computer
  • Navigate to  Manage
  • In the left hand pane, navigate to  Disk Management.
  • In the menu bar, click on Action, and then click on Attach VHD.
  • Locate your VHD file and mark it as read-only.

Initializing virtual VHD hard disks:

  • Click on Start
  • Right click on Computer
  • Navigate to  Manage
  • In the left hand pane, navigate to  Disk Management.
  • In the menu bar, click on Action, and then click on Attach VHD.
  • Locate your VHD file and click on OK.
  • Once it is mounted, right click on the virtual disk (which will show up as a blue hard drive) and click on Initialize Disk.
  • In the dialog that appears, select the partition style you want to use and click on OK.
  • Right-click on the unallocated space in the virtual hard disk and click on “New Simple Volume“,  follow  wizard’s instructions  to create a new partition within the VHD disk.

New disk drive should appear in “My Computer” and it will look just like regullar hard drive.