I am using Microsoft VPC running the supplied microsoft images to test IE6/7. The ip addresses that get assigned to these images are via dhcp and get valid ip addresses in my subnet. They can access the external internet just fine. However, they cannot ping my host machine, nor can my host machine ping them (using internal ip addresses). Thus, they can't access my webserver to test with.

How is this possible and how do I fix it?

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I had the exact same problem. In the Virtual PC, go to Tools -> Settings -> Networking, and change the Network Adapter from 'Shared Networking (NAT)' to the physical network interface on the host PC. After a few seconds reconfiguring itself, you should be able to ping the host machine by IP address or hostname. (Don't ask me how/why this works - I don't understand the technical differences between these networking modes)

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