I just installed my 3rd version of Windows7 (this time into a VPC Image) and I remember hearing online that there was a problem with Win7 running in VirtualPC2007. Something about the Virtual Machine Additions causing a blue screen on startup.

A quick search found this post, and in the comments I noticed the solution.

Update Virtual PC2007 to SP1. I didn’t even know there was an SP1 for Virtual PC, and maybe you didn’t either. I was running 6.0.156.0 (the old version). Check your VPC Version (Help|About) and make sure you’re updated to 6.0.192.0, and the Virtual Machine Additions should load and run fine in your Windows 7 VPC.