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I have Windows 7 Enterprise edition installed on my laptop on the real physical hard disk. Now I want to create a vhd partition on the c:\ root directory and be able to dual boot into my real machine or a vhd that also runs Windows 7. Is this possible at all and if, yes how. If I try to do it, the installation on the VHD says that it is going to rename some operating system files that it found on the C:\ drive.

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Have you seen this article. It seems to provide some good directions for what you need to do.

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