I've installed Windows 7 Ultimate and it is set to take up the entire drive, I'm also planning on storing the VHD files on this drive. Is there a way I can convert the host Windows 7 to a VHD file saving it on the same drive?

The reason for this is, when I want to reinstall Windows (i.e. create a new VHD file), I won't have to go through the actual process of reinstalling Windows, but can just convert the host to a VHD file.

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There is an app for that: Disk2vhd

Disk2vhd is a utility that creates VHD (Virtual Hard Disk - Microsoft's Virtual Machine disk format) versions of physical disks for use in Microsoft Virtual PC or Microsoft Hyper-V virtual machines (VMs). The difference between Disk2vhd and other physical-to-virtual tools is that you can run Disk2vhd on a system that’s online.

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