I love VHD mounting feature in Windows 7. It makes playing with virtual machines much easier. And let us not forget installing Windows 7 inside it.
You just go onto More Actions and select Create VHD (although this was hardest part for me since I am adjusted to right-click mentality). After that there comes a nice dialog.
This dialog gives everything in simple terms. If you decide to create fixed disk (as you should), Disk Manager just blocks. No progress bar, no message – plain and simple nothing. As you can imagine creating 20 GB can take a while. Only signal that something is happening is light of your disk.
I find this a little disappointing. Another great feature tarnished by half-done user interface. :(
[2008-05-08: This is fixed in release candidate.]