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I'm looking at ways that may be possible to distribute a Microsoft Windows (e.g. 7) virtual appliance (such as VMWare image) pre-configured and installed with a large application of mine.

Is this possible? If not, is it perhaps best to ask clients to perform a virtual appliance installation on their site and then install my application via a script of some sort?

For these kinds of scenarios I see that open source OSes are heavily used, but in my case I cannot use Linux or any other open source OS due to some requirements.

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I know this question is quite old but it took me a while to find this out as well. Microsoft has a "VHD Test Drive Program":

The Microsoft VHD Test Drive Program provides Microsoft’s partners a convenient and simplified process for creation of application images, facilitates its widespread distribution by making it available as a free download and enables accelerated evaluation and testing of these applications by customers. Please contact for more information.

It sounds like this would allow you to distribute a VHD with Windows and your software preloaded.

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Nobody but MS could answer that question in a way that would guarantee you being in the clear. Contact their licensing department and ask:

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Well with most software this is true, but this is Windows we're talking about. Maybe someone, somewhere, somehow has done something similar to what I'm talking about... I think it's a valid question to a forum. – User32 Feb 14 '11 at 14:24

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