In Windows 7 it is now possible to create virtual hard drives; this is done through the new disk management with VHD files, read more to learn how to use this feature.
Create a virtual hard drive
Click on 'Start'
Right click on 'Computer'
Click 'Manage' you might be prompted by User Account Control, agree and continue.
Pick 'Disk Management' on the left side, this might take some time.
In the menu bar click on 'Action' and pick 'Create VHD'. It will be possible to specify the size and placement of the virtual hard disk file.
Connect the virtual hard drive file
Click on Start.
Right click 'Computer' Click on 'Manage'.
In the left side pick 'Disk Management'.
In the menu bar click on 'Action' and then 'Attach VHD'.
In the dialogue box that appers you can specify the placement of your VHD file, find it and click on Ok. 'Disk Management Service' will now mount the VHD file.
When it is mounted, right click on the virtual hard drive, that will be shown as a blue hard drive, then click 'Initialize Disk'
You will now be prompted with a dialogue box, pick the partion placement that suit your needs the best and click "Ok "'Disk Management Service' activates the disk for use.
Right click on the unallocated space on the virtual hard drive and click "New Simple Volume" and follow the instructions to create a new partition on your VHD.
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