You have to create a “master” virtual machine which will be used to work with template VHD.

To install guest OS on master virtual machine you need .ISO file or physical DVD media with operating system distributive. You can download DVD ISO files from MSDN subscriptions.

Open “Hyper-V Manager” and click “New -> Virtual Machine...” from action menu to start virtual machine creation wizard.

• Give new VM some meaningful name helping to distinguish it from others, for example “Master - Windows 2008 Standard x64”. We recommend to establish some VM naming conventions, such as “Master - <OS_NAME> <OS_EDITION> <BITNESS> [(INSTALLED_APP_1, INSTALLED_APP_2, ...)], for example to indicate that particular VM is a master VM with Windows Server 2008 Enterprise x64, IIS, SQL Server and WSP installed you could use the following name: “Master – Windows 2008 Enterprise x64 (IIS, SQL, WSP)”.
• Select VM location. It is recommended to store virtual machines on a separate hard disk volume. It would simplify their backup procedure (VM backup procedure is described in a separate WSP VPS solution guide). For example, in our case the system volume is C: and Hyper-V virtual machines are created on M: volume. Again, we recommend here to define some folders structure, for example customer virtual machines are stored in M:\VPS\Customers folder and master VMs are in M:\VPS\Master folder.

• Give new VM enough virtual memory to run Windows Server 2008 (at least 512MB).
• Connect VM to valid external network
• Create a new virtual hard disk with the minimum space, just enough to install Windows 2008 and other optional applications. Windows Server 2008 requires minimum 10GB, so let’s give it 15GB of free space by specifying this size for new VHD on appropriate wizard step:

• Select “Install an operating system from a boot CD/DVD-ROM” option and select DVD image file (.ISO) or pass-through physical DVD drive on Hyper-V machine:

• On the last wizard step select “Start the virtual machine after it is created” option and click “Finish”.