Virtual PC is useful for creating development and test environments where a number of server products are required. Take for instance setting up a development environment for a BI engagement. You may need SQL Server 2005, Reporting Services, Analysis Services, MOSS and possibly even Performance Point. If your development environment consists of a single laptop, Virtual PC is something you want to check out. As an aside you can get decent performance when running 2-3 Virtual PCs with 4 GB of RAM.
Microsoft has a tool called SYSPREP which you can use to clone an existing VHD file that you've prepared. This allows you to create a Virtual PC image that you can make a copy of and use. SYSPREP can take care of generating a computer name and a unique SID so that you won't "collide" with existing Virtual PC images.
I'll provide an example of using SYSPREP with a Windows 2003 Server Virtual PC Image. Open the Deploy.cab file on the Windows 2003 Server CD from the Support\Tools folder (just double click in Windows Explorer). Extract the contents to a folder (e.g. C:\DEPLOY; highlight the files in Deploy.cab, right click, then select Extract). When you are running a Virtual PC image, you can click the CD menu option, select Capture ISO Image, and point to your Windows 2003 Server .iso image file; then use Windows Explorer to access the Deploy.cab file.
Run Setupmgr.EXE (from the folder where you copied the Deploy.cab contents) to create an "answer" file; you'll proceed through a series of dialogs that record your answers to certain configuration questions to be answered when you launch a VPC that you created by copying a sysprepped VHD file. The dialogs are pretty self-explanatory; make sure to select Sysprep Setup on the Type of Setup screen.
After running Setupmgr.EXE your Virutal PC will shutdown. At this point delete the .VMC file and save the .VHD file. You will no longer launch the Virtual PC image; when you want a new Virtual PC you create a new virtual machine and use a copy of the .VHD file. The first time you launch a new Virtual PC image, SYSPREP will do it's magic and you'll have a working VPC image.