Install Windows7 to vhd notes.

I’m currently trying an install of Windows7 to a vhd on one of my virtual xp machines (to see if it can be done). I’m thinking that this may be possible but we’ll see.
I’m following the instructions on Keith Comb’s Dual boot VHD blogpost but I did find that calling the vhd file c:\windowsrc7.vhd will cause issues as you cannot have the name starting c:\windows.
I’m hoping this is fixed in the RC (I have a feeling my dvd is the beta but i’m not sure) and certainly in the RTM version.
The whole reason I’m attempting this is to test my idea about truecrypt encryption. As I guessed, it is not possible to do this with Windows7 on a truecrypted drive as it sees the drive as raw. My hope is that by decrypting the drive, installing and then encrypting again it will work – time will tell.