Windows Home Server Installation on VPC
I've installed Windows Home Server virtually yesterday on my spare notebook. One thing to consider is the diskspace, Windows Home Server will require a minimum of 70GB of your disk space otherwise the installation will fail.
Warning (to many screen shots) 
Welcome to Windows Home Server Setup
It will ask for the hard drives
Select an installation type
Regional and keyboard settings
EULA
Enter the Windows Home Server Produck Key
Enter your Home Server Name
Formatting Hard Drive, acknowledge and comfirm...
Click "Yes" to proceed
After formatting your hard drive you are now ready to install Windows Home Server
A familiar "setup window" screen just like in Windows Server 2003
See "Windows Server 2003 for Small Business Server Setup" on top of the screen
After the reboot....
During Installing Windows these flashes on your screen: Powerful and Simple, Automated Computer Backup, Simple to Restore your Computer and Files, Share Folders, Grows with you, and Share Your Digital Media
After Finalizing Installation the system will reboot again
After the reboot the system will search for an update in the internet it will take around 15 minutes (depends on the speed of your internet connection) and once finished it will again restart and ask you to set the administrator's password.
And finally, you have your Windows Home Server installed and ready to be configured (see Windows Home Server Console icon). All in all it took me 1 and half hour to install Windows Home Server in Virual PC on a Dell Latitude | D610 with a 2.13 GHz Intel Pentium(R) M processor and 1.5GB of RAM running on a Windows XP Pro SP2.
