If you do a lot of SharePoint demos, chances are you will be using tons of VMs (Virtual PC, Virtual Server, VMWare, anything..). And if you're like me, you would not like to fire up multiple VMs; the less the merrier. This translates to squeezing in as many products/components into a single virtual image - but there are some caveats to know about:

Installing SharePoint on a Domain Controller

- You lose the Document Conversion feature. Document Conversion services can start, but whenever you try to convert a document to web, it simply fails.

Installing SharePoint and Exchange on the same box

- You lose the Incoming Email feature. SharePoint relies on IIS' Virtual SMTP to listen for incoming emails. And Exchange cannot co-exist with IIS' Virtual SMTP. I'm not sure if there are some creative work-arounds available, but will post it if I found any.

On another point (pun-intended), if you want to install Performance Point Server or Commerce Server into the same VM as the DC, you will want to install them first, but don't run its configuration wizards. Promote the VM to DC only after installation, and then only run the configuration wizard.

While still on the topic of VMs, here's some guerilla tips to keep your VHDs small and lean (faster to move around)

  1. Shrink all your databases and transaction logs. If you have OCS 2007 installed, this can free up quite a substantial amount of space.
  2. Set Virtual Memory settings to smallest possible minimum size. (I usually allocate 2GB RAM to my VMs, and my minimum virtual memory setting is 1GB).
  3. Restart (so that the Virtual Memory usage will be resized). 
  4. Delete everything in %temp%. Some files might be locked, probably one or two. You may be able to delete them if its related services are stopped. Also look for *.log files lying around your virtual hard disk, taking up precious space but utterly useless since this is not a production setup anyway.
  5. Clear all Event logs (You can also set maximum size for event logs, you don't need huge allocations for demos - right-click on the Event log categories and select Properties).
  6. Run defrag - sometimes need to run multiple times for better results.
  7. Run the Pre-compactor tool (this is available via an .iso image from the VMAdditions folder).
  8. Run the Virtual Disk wizard, choose "Edit" and "Compact".