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I am trying to install the lastest version of ubuntu in my windows 7 machine using virtual box. I have been following this example. Virtual box has created a new partition within my C: Drive for 8 gb. I was able to mount the ubunto iso using virtual box. Now when I try to install Ubuntu, It shows Ubuntu will be installed in the following drive and all the contents in it will be deleted. I wanna know does the installation would happen within the 8 gb space or would it format my C: Drive?

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If you create a virtual hard disk (your 8GB spacer) this acts like a normal hard drive. So the warning is completely normal. For the guest OS (the ubuntu you are trying to install) the virtual machine acts like a normal computer. And like on a real computer it's going to ask wether you want to format the drive or not.

Conclusion: you cans safely format because you're formatting the virtual harddrive (disk file) and not your real physical one.

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