Over the last week, I have received many requests for getting Device Emulator to work within Virtual PC and get it to talk to another VPC image on the same machine. Yes, you can run the Emulator inside a VPC. However, you will have to use the Virtual Machine Network (VMNet) Driver inside the VPC. What you first need to do is to (a) get the two VPCs talking to each other (over a private network hosted by the host PC) and (b) then get the emulator within one VPC to obtain network connectivity.
Here are the detailed steps to get the emulator to work within your VPC.
1. Install the "Microsoft Loopback Adapter" on the host PC (running the VPC).
2. Configure your VPC to use the Loopback adapter. To do this, n the host PC (running the VPC).
3. Now, you want to run the Device Emulator inside the Virtual PC.
4. The Virtual PC gets network connectivity through the loopback adapter interface on the host PC. You can check through "IPConfig" that the VPC OSes have auto-IP addresses. The OS running inside the emulator will also get an auto-IP address and will be able to communicate with the other VPC.