Quoting from Virtual PC Guy blog:
I have been running Windows Vista for a while now (one of the benefits of being a Microsoft employee) and now that the rest of the world can access it I thought I should pass on some information about running Virtual Server / Virtual PC on top of Windows Vista Beta 1.
There are a number of issues that you should be aware of:
Virtual Networking does not work on top of Windows Vista Beta 1. Yup, this is really annoying – but it does not work. Thankfully for Virtual PC users shared networking continues to work just fine.
Upgrading to Windows Vista Beta 1 on a machine with Virtual PC or Virtual Server installed will generate an error: AddDriverPackageIntoDriverStore:Failed to install the driver package. So you should uninstall VPC or VS before attempting to upgrade your host.
Some Virtual Server specific issues are:
A number of host crashes have been reported running Virtual Server on the x64 version of Windows Vista Beta 1.
IIS is installed, but disabled by default on Windows Vista Beta 1. You will need to start the World Wide Web Publishing Service from services.msc
Connecting via VMRC to a running VM will lock the mouse to the window. The host key will not work to break out of the VMRC session. To break out of the VMRC window, use CTRL-ALT-DEL and then click Cancel.
Some Virtual PC specific issues are:
Starting a virtual machine causes Glass (uDWM) to crash (for those who do not know – the uDWM is what implements the ‘cool 3D effects’). This is actually kind of interesting to see as the entire desktop seamlessly switches back to 2D mode – and when you exit Virtual PC it goes back to 3D mode.
When LUA is enabled, you must manually launch Virtual PC with elevated privileges, otherwise Virtual PC cannot write to / or launch any virtual machines.
Eh… I know that that sounds kind of grizzly – but as I said I have been running Windows Vista for a while now and have been happily using Virtual PC on top of it. And don’t worry – we will have this all sorted by the time we ship 😉