Weird problem. Using virtual PC 2007, the status of the caps lock is reversed in the guest machine. If caps lock is off on the host, the guest has it on and vice-verse.
Host: Windows 7 x64
Guests: Windows 2000 Pro & XP Pro
Things I've tried: Rebooting host. Reinstalling Virtual PC 2007 SP1 and hotfixes for it. Using on screen keyboard in guest to toggle caps... works until you press caps lock again.
Any ideas? I've used VPC2007 before with these guest OS without this issue.