Microsoft's Virtual PC 2004 is one of the hottest applications to come out of Redmond this year. Virtual machine (VM) technology first gained popularity in lab settings and for training purposes but has since become an effective solution for running legacy applications, consolidating servers, and even carrying out on-demand grid computing. In this month's Top 10, I provide the tips you need to make the most of Virtual PC 2004.

1. Run Windows Server and Linux  Although Microsoft doesn't officially support running any Windows Server OSs or Linux on a Virtual PC system, in practice they work fine. Virtual PC will display a warning message whenever you attempt to install an unsupported OS, but it will run normally.

2. Utilize Virtual Machine Additions   Virtual Machine Additions provide a high-performance video driver and the ability to cut and paste text and images between the host and guest OSs. To install this add-on feature, go to the Guest menu, select Action, and choose Install or Update Virtual Machine Additions.

3. Share files with the host   Virtual PC saves all the guest VM's data in a virtual hard disk that resides on the host system. However, the guest VM can see the contents of only the virtual hard disk, not the host's hard disk. To exchange files with the host, select Edit, Settings, Properties, Shared Folders and define a folder on the host that will be shared by the guest VM.

4. Use fast hard disks  Virtual PC excels at running demos on laptops. However, remember that the performance of the VM is highly dependent on hard-disk transfer speed, and many laptops don't have fast hard disks. Although 4500rpm disks are fairly common, you need at least a 5400rpm disk for good demo performance.

5. Easily move VMs between systems  One of the coolest things about VMs is the ability to easily move them to different host systems. To move a Virtual PC system, suspend or shut down the VM, then copy the virtual hard disk (.vhd) file and virtual machine configuration (.vmc) file to the new host.

6. Change the MAC address  The ability to copy VMs is extremely handy, but it can cause problems when you try to run copied VMs simultaneously. Copying the .vmc file also copies the media access control (MAC) addresses that the VM uses, and MAC addresses can't be duplicated on the same network. To make Virtual PC generate a new MAC address, simply edit the .vmc file and delete the MAC address entry.

7. Use ISO images  The ability to use International Organization for Standardization (ISO) disks makes installing guest OSs and other software easy. The Virtual PC machine can mount and use ISO images exactly as if they were a physical CD. To mount an ISO image, open the CD menu and select the Capture ISO Image option.

8. Use undo disks  Terrific for demonstrations and training, undo disks let you discard any changes you make on a VM. When you're using undo disks, all changes you make to the VM are written to a temporary file. When you shut down the VM, you can save or delete the changes. If you save the changes, the contents of the temporary file merge with the base .vhd file.

9. Use differencing disks  By letting you use existing .vhd files as starting points when creating child .vhd files, differencing disks can save you much time reinstalling OSs and applications. The child .vhd files contain only the changes from the parent. To create a differencing disk, go to the Virtual PC Console and select File, Virtual Disk Wizard. From the wizard, select Create a new virtual disk, give it a name, then select Differencing for the disk type and choose the parent .vhd file.

10. Get more RAM  Physical RAM is the limiting factor in running VMs. VMs can use only physical memory, they can't use virtual (or paged) memory on the host. As a rule of thumb, 1GB of physical RAM is typically enough for four VMs. Virtual PC 2004 supports as much as 3.6GB, so if you want to run several VMs, look for a motherboard that supports that much RAM.