Virtual Server allows you to use VHDs that are stored on any device that supports the NTFS file system. If you have created a VHD on an external SCSI disk, you can attach it to the VM. Keep in mind that the VHD can be attached to the VMs IDE or SCSI channel – it doesn't matter where the file is stored on the host file system. In fact, you can even launch VMs that use VHDs that are located on a network share. If you want to convert an entire disk, use the "Linked Hard Disk" feature in the Virtual Server Administration Web site. It will allow you to access the raw contents of the disk for the purpose of conversion.
This was first published in February 2008