Is it possible to boot from a Windows WIM image or is that not possible? What's the difference between ISO and WIM?
WIM is a multi “image” file format that supports having one of those images declared as “bootable” i.e the typical case of booting a PE environment (boot.wim) contained on MS Windows Install Distributions.
The wim booting process would be something like:
ISO and WIM are just different storage file formats with different goals. While the first one is related to the CD/DVD format, the second one is able to hold several images of MS OSs as “snapshots”; I mean as working images of different OSs.
These steps are taught in the MCITP windows 7 course.
It should then be easy for you to boot from VHD files that were created in Microsoft's Virtual PC