Virtualization capability has been added to the Disk Management tools. If you open Computer Management, go to the Disk Manager tool and then click the Action button at top, you will see the options Create VHD and/or Attach VHD. This allows you to create and mount a virtual hard drive directly from within the GUI. Note: With Windows 7 you even have the ability to boot a Windows 7 VHD.
Windows 7 adds a great deal of virtualization support, including the ability to create and attach virtual hard drives from the GUI.
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