You cannot start a virtual machine in Microsoft Virtual PC 2004 Service Pack 1 (SP1) or in Microsoft Virtual Server 2005 from a third-party startup CD or from an ISO file that contains a third-party startup CD image.
When you start a virtual machine that does not have a guest operating system, you receive the following warning message:
Reboot and Select proper Boot device or Insert Boot Media in selected Boot device.
If you insert a startup CD for the operating system into the physical CD drive, or drag an ISO file that contains a startup CD image to the CD icon in the status bar of the virtual machine window, and then press ENTER, Virtual PC 2004 and Virtual Server 2005 will ignore the operating system that is on the CD or on the CD image.