Windows 7 – Boot from VHD Feature
The new feature in Windows 7, named VHD Boot, allows you to boot your Operating System from a Virtual Drive.
A 20 minute video on the functionality, and how to configure it is available on TechNet. It walks you though the creation of a VHD file, the configuration of the boot sequence using bcedit and describes the limitations of this feature.
This scenario is also possible in some Editions of Windows Server 2008 R2