“What is this Window 7 VHD thing that is exciting all the geeks?” - Here’s a 61 page “Virtual Hard Disk Getting Started Guide” that might answer that question.

Microsoft Downloads - Virtual Hard Disk Getting Started Guide

“This guide provides an introduction to virtual hard disks (VHDs) in Windows 7 and Windows Server 2008 R2.

File Name:	VHD Getting Started Guide.doc
Version:	July 2009
Date Published:	7/23/2009
Language:	English
Download Size:	1.3 MB

This guide provides an introduction to virtual hard disks (VHDs) in Windows 7 and Windows Server 2008 R2. It includes an overview of technologies that you use to configure VHDs, as well as procedures to help guide you through deploying VHDs.

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From the doc;

“…

Getting Started with Virtual Hard Disks

Windows Server® 2008 R2 and Windows® 7 is the first version of Windows to provide native support for virtual hard disks (VHDs). This guide describes the scenarios that guided the development of this feature, detailed steps about how to employ the functionality (including image creation, deployment, and maintenance), and the associated tools, scripts, and APIs.

Introduction to Virtual Hard Disks

• Introduction
• Supported operating systems
• Overview of tools
• Common usage scenarios

How to Perform Common Tasks

• Creating, attaching, and detaching VHDs by using Disk Management
• Creating, attaching, and detaching VHDs by using DiskPart
• Creating a bootable VHD
• Creating VHDs by using Hyper-V
• Preparing a VHD image for boot
• Deploying VHDs by using Windows Deployment Services
• Deploying a bootable VHD by using Xcopy
• Migrating VHDs between physical and virtual environments
• Servicing images
• Backing up images
• Performing advanced tasks by using DiskPart

Appendix: Tools, Scripts, and APIs

• Tools used to maintain VHD images
• Scripts
• APIs

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Supported operating systems

Support for VHDs in Windows 7 and Windows Server 2008 R2 is targeted toward managed environments. Datacenters and large enterprises that maintain a managed deployment solution, including master images, will derive the greatest benefit from this feature.

All of the operating systems in the following table support VHD operations (such as creating and attaching VHDs). The table shows those that support booting from a VHD

Windows 7 Editions	Boot from a VHD
Home Basic	No
Home Premium	No
Professional	No
Enterprise	Yes
Ultimate	Yes
Starter	No

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The boot to VHD feature is one I’ve heard a great deal about in the last couple weeks so I found it interesting that you can’t use that feature with Professional (aka the Business “buy off the shelf” SKU).

In any case, if you’re interested in the VHD features in Win7/Server 2008R2 then this is a document you should take a look at.