Creating the Basic Virtual Environment

After you install Microsoft Virtual Server 2005 Release 2 (R2) on your test system, you'll need to perform some preliminary configuration steps: creating virtual machines (VMs) and virtual hard disks. Once you've set up your virtual environment, you can install whatever OSs you choose on the test system. Here, I explain how I accomplished both sets of tasks—which I needed to do before I could install Exchange Server 2007 Beta 1 on my test machine.

Creating VMs and Virtual Hard Disks
To create your VMs, first go to the Virtual Server Administration Web site, which resides on whatever machine you installed Virtual Server 2005 on. Resist the temptation to click Create under Virtual Machines; you’ll want to create and configure your virtual network(s) and virtual hard disk(s) first. Instead, under Virtual Networks, point to Configure, and click Internal Network. From there, click the Network Settings link and make sure you set Physical network adapter to None (Guests Only). Now as long as you connect your VMs to this virtual network, as Web Figure 1 shows, they'll be isolated from your production network.

While you’re configuring the Internal Network, click the DHCP Server link and disable it. You’ll be creating VMs in a few minutes, one of which will be running the DHCP service. Now that your virtual network is ready, you can create some virtual hard disks. Under Virtual Disks, point to Create, then click Fixed Size Virtual Hard Disk. Although creating a dynamically expanding virtual hard disk is faster in the short term (i.e., it takes less time to create), a virtual hard disk with its space already allocated performs faster because no resources are wasted expanding the virtual hard disk on the fly.

Type the path and name for your virtual hard disk. I make my virtual disks 16GB, but you can make them any size you want within the limitations of the OS that you’ll install on your VM. Remember that you’ll be creating quite a few of these disks, so size them appropriately; you don’t want to run out of disk space. I name my virtual hard disks according to the machine role—for example, DC for a domain controller (DC), EXCH for Exchange—but you can name them whatever you want. Once you’re satisfied with your selections, click the Create button.

Virtual Server can create multiple virtual hard disks in the background, so repeat the previous procedure above until all your virtual hard disks are ready to go. The creation process can take some time depending on your hardware; creating a 16GB virtual hard disk on my system took 10 to 15 minutes. Now’s a good time for that caffeine fix.

Once all your virtual hard disks are ready, click the Create link under Virtual Machines. Give the new VM a name; I always name mine the same as its respective virtual hard disk. Allocate as much RAM to the VM as you think you’ll need. I used 512MB for each of my VMs and got decent performance from them. Under Virtual Hard Disk, select the option to use an existing virtual hard disk, and specify the corresponding .vhd file you created earlier (the .vhd file "contains" the virtual hard disk). Pick SCSI (not IDE) from the Bus drop-down menu; your virtual hard disk will perform faster over a SCSI connection. Finally, under Virtual network adapter, make sure your new VM is connected to the Internal Network. Finally, click Create. Creating your VM will take only a few seconds, regardless of what hardware your test machine is using.

Repeat this process for each of your virtual hard disks, and you’ll soon have several newly minted VMs ready to go. If you’re making a duplicate of my test system, you’ll need four VMs total. Again, each one should have a 16GB virtual hard disk, 512MB of RAM, and be connected to the virtual network called Internal Network. My VMs are
? DC for Active Directory (AD)—that is, the DC created earlier
? EXCH for Exchange 2007
? XP1 for Microsoft Outlook Web Access (OWA) and Microsoft Office Outlook 2007
? XP2 for OWA and Microsoft Office Outlook 2003
Figure 1 in the main article shows the layout of my test environment.

Installing Windows 2003
If you’ve ever dreamed about installing Windows multiple times in the same day exactly the same way, your dream has come true. Put your Windows Server 2003 Release 2 (R2) CD-ROM in the test machine’s drive, fire up the Virtual Machine Remote Control client (VMRC), and click the machine on which you want to start the installation.

The first time you start a VM is kind of neat. You’ll see POST messages, such as the amount of RAM installed and SCSI BIOS messages, just as you would on a "real" computer. Shortly thereafter, Windows Setup starts. You can install the OS on more than one VM at a time; in the VMRC, just click any other VM you want to start. Although installing the OS on multiple VMs simultaneously will make the installations crawl, you can start as many as you need and do something else during the installations.

Installing Windows Server is the same installation procedure you're used to. I set both DC and EXCH to be licensed per-user (10 connections) and removed the Network Load Balancing (NLB) driver during Setup. My test network address is, so I gave DC an IP of with no default gateway and EXCH an IP of with a default gateway of After you complete Windows Setup, you’ll be prompted for the Windows 2003 R2 Additions CD-ROM. Insert it and install the R2 components.

You’ll notice at this point that performance (e.g., screen resolution, mouse "capture," overall system responsiveness) is rather poor, so you’ll want to install the VM Additions now. The VM Additions are a component of Virtual Server 2005 R2 that adds special drivers and software to a VM to enhance its performance and manageability. Not only will this make the VM faster by a factor of 10, but the Additions will give you the ability to set higher screen resolutions and color depths and avoid the pain of having to Alt+Click to get your mouse cursor out of the VM and back onto your local machine. Specifically, the Additions let you simply move your mouse into and out of the VMRC window as though it were a regular Windows application. Without the Additions, you have to click in the VMRC window to "capture" the mouse cursor, then press Alt+Click to "uncapture" the mouse cursor and use it outside of the VMRC window.

To install the VM Additions, from the Virtual Server Administration Web site, under Virtual Machines, point to Configure, then click the machine you want to install the VM Additions on. Then click the Virtual Machine Additions link, select the Install Virtual Machine Additions check box, and click OK. The installer should start automatically on your VM.

After you’ve installed the VM Additions and rebooted your VM (required), I highly recommend that you copy the \i386 directory from the Windows 2003 R2 CD-ROM to the virtual hard disk. Having the \i386 directory on the virtual hard disk will be a huge timesaver, since you’ll need it to install additional Windows components in the next step and later on as well.

Installing Additional Apps: AD, DNS, XP, and Outlook 2007
Now you have two clean installs of Windows 2003 R2. At this point, you’ll want to install AD and DNS on the VM that you named DC. My domain name is incubator.local, but you can choose whatever name you prefer. I also installed WINS and DHCP with one scope starting at After that, I raised the domain functional level from Windows 2000 mixed to Windows 2003 and the forest functional level from Windows 2000 to Windows 2003. Exchange 2007 doesn’t support mixed-mode domains.

If you're prompted for two different CD-ROMs (Windows 2003 SP1 and Windows 2003 R2) when you run Add/Remove Windows Components to install AD, DNS, WINS, and DHCP, simply point the installer to the i386 directory that you copied over for both prompts. Note that after installing Windows on the VMs, you'll also need to join the EXCH VM to the newly created domain.

Now install the Windows XP client machines, which will use your newly created DHCP server to get their IP addresses. Join them to your domain during Setup and install the VM Additions. Then install Outlook 2007 Beta 2 on the VM named XP1 and Outlook 2003 on the VM named XP2. The only issue I had with installing Outlook was when the setup program for Outlook 2007 complained that I had an application open and should close it before continuing the installation. The text of the message box was completely blank, yielding no clues as to which application was causing the problem. Initially I had a Windows Explorer window open; I closed it, selected Retry, and got the same result, so I chose Ignore. Doing so got me past the error message and didn't cause me any problems later on.

You might consider setting the default Microsoft Internet Explorer (IE) start page on each VM to be a blank page since the VMs aren’t connected to the Internet. Doing so will save you some time if you inadvertently open IE or if a program you've installed tries to direct you to a Web site.

If the installation procedures I've just described sound a bit monotonous, the upside is that they provide an excellent opportunity for anyone aspiring to obtain a Microsoft Certification to get some real-world experience (and not worry about doing any career-altering damage).

Finishing Up
After you've completed all the installation procedures, shut down all your VMs and make a backup. You’ll want to back up all your virtual hard disks, and, optionally (but which I recommend), your shared virtual networks and shared virtual machines. They're located in \Documents and Settings\All Users\Documents on your test machine. Label this backup Original Configuration. You can always restore it later to run through things again or if you decide to do some experimenting and inadvertently (or purposely) hose yourself. That’s the beauty of this solution: It forgives your mistakes.

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