Gah... I have just realized that as I was away on holidays during December I missed the December Customer Technology Preview release of Windows Vista.  Thankfully this build is quite easy to install inside of Virtual PC.  Before we get started - you will need two things:

• The December CTP install media (build 5270)
• Virtual Machine Additions from Virtual Server 2005 R2

For the latter - if you are using Virtual PC you can download the Virtual Server 2005 R2 trial (from http://www.microsoft.com/virtualserver) and use the Virtual Machine Additions from there.  This version is supported on both Virtual Server and Virtual PC - and has a number of Vista optimizations.

Once you have this - you should follow these steps:

1. Create a new virtual machine with a 16GB (or larger) virtual hard disk and at least 512mb RAM
2. Boot off of the install media (note: most ISOs for the December CTP are under 2.2GB in size - which means that you can boot off the ISO directly under Virtual PC)
3. On the first page select 'Install now'
4. On the next page, hit 'Shift-F10' - this will bring up a command prompt window
5. Type in:
      - DISKPART
      - SELECT DISK 0
      - CREATE PARTITION PRIMARY
      - EXIT
      - EXIT
6. Now you will need to reset the virtual machine (hit host-key + 'R') and boot off of the install media again
7. You should now be able to go through with the default installation of Windows Vista
8. When you are finished you should be able to log in and install the Virtual Machine Additions

It runs quite well under Virtual PC:

Cheers,
Ben