I've used Virtual PC to test just about all the Linux distros and Microsoft OS's and it works perfectly.
When using Virtual PC, you don't have to physically partition your hard drive. It creates virtual drives. If you want to have additional "partitions" you just create another virtual drive for that OS or simply partion the current virtual drive just like you would a physical drive. If you create additional virtual drives, the OS will recognize that virtual drive as additional hardware and you just set it like youi would normally.
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