Dugie and others have posted about this in the past, now Conrad has added some great detail, especially leveraging native Microsoft tools (some still in beta). Basically you have a choice of:
Method 1. Using WAIK (Windows Automated Installation Kit) which uses Imagex.exe and WinPE rather than a 3rd party tool such as Ghost.
Method 2. Using VMDMount (you need Virtual Server 2005 R2 SP1 (beta2) to get VHDMount) - if you just need the VHDMount part of the Virtual Server beta Dugie (once again) has the method.
Remember to test these methods until you're happy...I know I will be.
<p>myITforum Daily Newsletter Daily Newsletter January 4, 2007 The myITforum.com newsletter is delivered</p>
<p>All round good guy and virtualisation blogger Clive Watson, has just answered one of my burning questions...</p>
<p>Is it possible to shrink the VHD files with this methods?</p>
<p>Tamas - in theory yes shrinking should work but I've not tried it yet!</p>
<p>Great info from Dugie once again, and more details from the developers at <a rel="nofollow" target="_new" href="http://vmtoolkit.com/">http://vmtoolkit.com/</a> We now</p>