Microsoft has release Virtual PC 2007 for free. Well technically it's free if you are using it for personal stuff, for corporations it's a different issue. So far I haven't seen many differences from VPC 2004. However, for anyone that does software deployment, application testing, or QA this is a must have product.
Getting your image setup may take some time. For some reason loading Windows initially takes forever. After that you will see pretty good performance doing most task. Unlike Virtual Server, VPC 2007 doesn't allow you to make templates and restore to new VPC's at the click of a button. Most of us would like to take a snapshot of the state of the VPC and save it off somewhere in case we need to revert back to that point as we often do. However you can simply enable Undo Disk in your virtual session and handle it that way. With undo disk enabled you have the option of "Merging the changed data to disk". What that means is that once you get your image to the point you like it, before you begin and destructive testing, close your VPC session and check the box for "Commit changes to hard disk". This will take a while but what it is essentially doing is saving the data and creating a restore point. You can revert back to this point at any time. You can also copy your VHD (Virtual Hard Disk) to another location and restore it later if need be which is a sure proof way to ensure you don't loose anything.