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I am trying to install Windows 2008 R2 with SP1 in a virtualized host on Windows 7. I have tried VMWare 7 and Virtual Box, but both give me the same error:

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Any tips what I can do? I've re-downloaded the media from MSFT licensing and other locations.

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The answer is to use the RTM build of Windows 2008R2. The SP1 slipstreamed version from MSDN and MSFT licensing don't work... though you can later update the VM to SP1

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