I learned how to do this at TechEd 2004 in a lab led by Robert Larson, one of our resident Virtual Server gurus.
You can create a “base” virtual machine with the operating system and applications you want, and then copy its .vhd file to use for other virtual machines. When you do this, it’s important to run a tool called Sysprep on the base virtual machine. That way, when you start a virtual machine that uses a copy of the base virtual machine’s .vhd file, the guest operating system will be assigned a new SID, GUID, MAC address, and so forth when it starts up. This way you won’t end up with network conflicts between different virtual machines that use the same copied .vhd file.
Step 1: Install the Setup Manager files in your guest operating system
Step 2: Create an answer file
Note: This procedure applies to the Sysprep version for Windows Server 2003. You’ll need to modify the steps for other versions of Sysprep. The files that you extracted from the Microsoft Web site include a help file named Deploy.chm that has specific information for your version. It's a good idea to read the help file and become familiar with this tool and figure out how to customize the following steps for your own environment and purposes.
Step 3 – Sysprep the guest operating system
You can now make copies of this .vhd file and attach them to different virtual machines. After you copy the .vhd file, you need to remove the copy’s read-only attribute. When you start a virtual machine with a copied .vhd file, it will receive a unique SID and other identifiers. You can also use the base .vhd file as the parent drive image for several differencing drives. The unique identifiers for each guest operating system built in this way will thus be written into the differencing drives, and not the parent.
Note: The fourth time you run Sysprep on the same media, you receive the message, "Your grace period limit has been reached and will not be reset." For more information, see http://support.microsoft.com/default.aspx?scid=299840.