Can you share with us what is your idea of the virtual machine? Would you like to test several operating systems with the respective programs on it or you need it for something else?
According to the MicroSoft's official web site the steps for creating a virtual drive are following:
Create the virtual hard disk. To do this, follow these steps:
In Virtual PC, click File, and then click Virtual Disk Wizard.
Click Next, click Create a new virtual disk, and then click Next.
Click A virtual hard disk, and then click Next.
In the Name and location box, click Browse, and then locate the drive or partition where you want to save your virtual hard disk.
Type a name for your virtual hard disk, click Save, and then click Next.
Under Virtual Hard Disk Options, click Linked to a hard disk (Advanced).
Read the Caution message, and then click OK if you are sure you want to continue.
Click the physical hard disk or volume that you want to create a virtual hard disk from, click Next, and then clickFinish.
Keep in mind that the procedure will create a virtual hard disk that functions as a shortcut to the physical hard disk.