Installing Vista under Virtual Server 2005 R2 is significantly easier than installing under VPC or Virtual Server 2005 RTM.  There are two main reasons why:

  1. Virtual Server 2005 R2 includes the new version of the Additions that work (but are UNSUPPORTED) on Vista.

    - and -
  2. Virtual Server 2005 R2 can mount an ISO file that exceeds 2GB in size.

To install Vista under Virtual Server 2005 R2, configure a new Virtual Machine and mount the Vista ISO.  Start the vm and boot to the Vista disc.  Prepare your Virtual Hard Disk, and reboot (to the Vista disc again).  Answer the questions you're asked, and install the Virtual Machine Additions that ship with R2 once Vista is installed. 

Easy, huh?

If you're using Virtual Server 2005 RTM, take a look at my instructions for installing under Virtual PC - they're quite similar.