by Kevin Fogarty

How to Create a Virtual PC on Windows 7

Nov 04, 2009
Small and Medium BusinessVirtualizationWindows

You're not supposed to be able to get XP Mode without the right version of Win7, but if you have a valid XP license, it works just fine. Here's step-by-step instructions on how to do it, plus tips for a safe, hassle-free install.

Windows 7 is already a big hit for Microsoft, according to market-share tracker Net Applications, which shows it rising past all the extant versions of Linux and Windows except Vista and XP and into fourth place hot on the heels of the Mac OS X 10.5.

One of its most talked-about features is a version of XP built right in to some editions, so it can run in native mode on a virtual machine all those applications that never made the leap compatibility with Windows Vista.

Except XP Mode doesn’t come automatically; you have to install it. And it doesn’t come with all editions of Windows 7.

[ For timely virtualization news and expert advice on strategy, see’s Virtualization Drilldown section. ]

Users running Professional, Ultimate or Enterprise have to download both XP Mode and Virtual PC, on which it runs. Those with Home Premium or Starter are stuck; Virtual PC not only doesn’t come with those editions, Microsoft theoretically doesn’t allow Virtual PC to even run on anything but Vista, XP or the three more exalted editions of Windows 7.

That’s not to say Virtual PC doesn’t run there, anyway, however. And, fortunately, the installation procedure is the same for Virtual PC whether you’re licensed for XP Mode or not.

[ For complete coverage on Microsoft’s new Windows 7 operating system — including hands-on reviews, video tutorials and advice on enterprise rollouts– see’s Windows 7 Bible. ]

I loaded and ran it on a laptop running 64-bit Windows 7 Home Premium on an Intel Core 2 Duo with 4GB of memory. Here’s how to get going:

Step 1: Check your Processor

Intel and AMD have both built hooks into their processors that allow the host and guest operating system (the virtual machine) to trade off tasks more smoothly. Virtual PC will work on chips that don’t have those hooks, but not well. Microsoft provides a free utility to check your processor. Intel and AMD have their own utilities as well, if you want to double check. Intel Processor Identification Utility; AMD Virtualization and Hyper-V compatibility Check.

Once you know if the silicon supports it, check to see if your BIOS is set up to use those hooks. Chances are, for most desktops and laptops, it’s not. Microsoft offers instructions and links to specific manufacturers here.

Step 2: Download Virtual PC

Microsoft requirements call for a 400 MHz or above Pentium-compatible processor, 35 MB of disk space and Windows XP or Vista. There are 32-bit and 64-bit versions; Virtual PC cares about the difference. The newest version of Virtual PC supports USB peripherals and are supposed to be able to support 64-bit operating systems within the VM as well. Either way, get the right edition for your machine.

Step 3: Build your VM

Once you’ve downloaded the installation package, launch it and follow instructions. Then click the Start menu and find Virtual PC. It will launch a Wizard that offers the choice of opening an existing virtual PC, creating one with default settings or will walk you through the process of configuring one yourself. Pick the latter to do things like increasing the RAM available to the VM from the default of 128 MB to a gigabyte, or raise the default virtual-hard-disk size from 16 GB to something with enough room for an OS and any applications you want to run only within the VM. The whole process takes less time than it does to install most bits of freeware. But that’s only the configuration, not the VM itself.

Step 4: Launch and Provision

After configuration, the Virtual PC Console remains onscreen while Virtual PC runs in the background, taking up about 17 MB of memory just sitting there.

Clicking Start opens a command window in which Virtual PC uses DHCP to try to find itself an IP address. If you haven’t already provisioned an operating system image, it will think about things for a while, then tell you to go find a proper boot address.

To install the OS from a CD or ISO file, make sure the window surrounding the VM — the actual VM, which looks at this point like a DOS window, not the console you used to set the configuration — is the active window on your machine. Then either insert the CD into the drive or drag your ISO file onto the CD icon in the Virtual PC command window. If you’re loading the OS from a CD, go to the menu bar of the VM window, click on CD and tell it to capture the physical CD drive.

My VM didn’t like 64-bit versions of either Windows 7 or Vista, but was fine with a 32-bit version of XP Home Edition. The install takes about as long as it would on a normal hard drive, but instead of asking what partition of your hard drive it should live in, it shows only unpartitioned space on the virtual hard drive you’ve already set up.

The install then proceeds normally, within one window of your PC rather than taking up the whole thing.

Warning: The VM doesn’t know it’s not the only computer on your computer. So when you click on anything in its window, will capture the cursor and not let it go again, which would be really embarrassing if anyone wandered in to see why you were cursing at your laptop.

To free your cursor, hit the right ALT key. If the VM is running in full-screen mode, press right-ALT-ENTER.

After setup, walk through the configuration screen and type in a valid Windows key for the version of the OS you installed.

Step 5: Install Additions

Before you can do anything interesting you have to install a set of add-ons that allow Virtual PC to do things like share folders, share the clipboard and drag-and-drop things between the VM window and the host OS. You have to install them separately, using the VM window, not the Virtual PC Console.

Go to the Menu bar of the VM and click Action, then pull down to Install or Update Virtual Machine Additions. It will pop up a window asking you to confirm, and then disappear as if you were kidding.

To actually run the installer — which the VM believes is either a CD or an ISO file — go to the Start button, then choose Run and navigate to what would normally be the CD drive, where you’ll find the Additions ISO. Open the folder appropriate to your host OS and run the application inside. Then reboot the VM.

Step 6: Load Applications

Like most things virtual, loading applications or accessing data on the host machine is like walking across a transparent bridge. Once you know it’s there, it’s simple; until you do, you’re stuck.

The bridge in this case is the Shared Folder. Just as with two physically separate machines, you can exchange data or applications through a Shared Folder that both have permission to use.

Create one from the VM window. Click on Edit in the menu bar, pull down to Settings and look for the Shared Folders icon toward the bottom. Choose it, navigate to a folder on the host machine that you can use to move documents or application setup files between your real and virtual machines, and click OK.

The shared folder becomes a network drive for the VM. To launch applications, click on Start, Run, and browse to the “network drive” Z: , which retains the name of the folder itself. Then just launch the setup for the new application.

That’s it. You’re done. Well, almost.

Step 7: Stay Safe

Don’t forget to install all the security updates for the new OS and install whatever anti-virus or other security software you have on the host OS. The VM has to route all its traffic through your (presumably) secured host OS, but that doesn’t mean a ZIP file or other potential threat won’t get through and launch on the VM.

A few more warnings and tips from Steve Bass of the useful and amusing TechBite newsletter, author of PC Annoyances, and former columnist for PC World.

  • If you defrag your hard drive, exclude the humungous swap file the virtual PC creates (check Options in your defragger), or it will take forever to complete.
  • Some virtual PC software — including VMWare’s — let you save multiple versions on your machine; each can gobble gigabytes, however. Keep an eye on available disk space, especially on a notebook.
  • Running Win7, XP and Linux on the same machine at the same time is cool, but unless your system is a monster, you’ll spend more time waiting than computing.
  • Finished with XP Mode or your Virtual PC for now? Shut it down to free up system resources for the rest of your work.

And another couple of warnings, from Bob Arnson, who works for Microsoft on its App-V team, but blogs as his own geek.

  • When you launch a VM it still needs an operating system and applications, which take time to set up the first time around. You can clone your main OS with tools such as Acronis True Image, but it still takes time to do the install. Once you have the image, though, taking one VM down and launching another if much faster than reinstalling an OS or application on real hardware.
  • The VM isn’t a real machine, but it uses a real OS, for which you need a license. And if you want to connect a cloned OS to a domain, you have to use a tool like SysReq software distribution utility.

Follow everything from on Twitter @CIOonline.