When I initially worked with Virtual Server, I used default configuration. That caused me some trouble, as I started creating new virtual machines, my system drive started loosing space. I had to move all those virtual machines and their virtual disks manually to another location to release some space. Then I had to add those machines again, after doing what I should had done earlier.
You can avoid this problem by settings these paths after installing Virtual Server. There are two paths associated with Virtual Server.
Virtual Machine configuration folder: this is where virtual machine configuration files, virtual hard disks, undo disks would be stored for each virtual machines.
Search paths: These are additional paths, where you can look for existing virtual machines, virtual hard disks, undo disks, any ISO image files (.iso) that you can use later on.
Considering how I wanted to approach my SharePoint exploration, I had to install Microsoft Virtual Server on my machine. That way I would be able to emulate a true intranet environment, in which I would have a domain controller, and other required resources.
Another reason I had in mind was that, I could save images of these machines at different stages, and then can experiment with different configurations, saving some of my time to redo all those installation again.
I am using Microsoft Virtual Server 2005 R2 SP1, which is the latest at the moment. I have Windows XP Professional with Service Pack 3 installed on my physical machine, with a lot of RAM, and disk space. One more thing I must check, do I have installed IIS (Internet Information Services), yes I do. I have IIS 5.x with me, and it should be there, because Virtual Server presents web interface for its administration.