Installing Windows Server virtualization on Windows 2008

Windows 2008 64-bit edition comes with the option of installing Windows next generation virtualization application codenamed Veridian. By default the application will not be a selectable option when Adding and Removing Roles from Windows 2008.

Please note that at this time, this is only available in full installation of 64-bit editions of Windows 2008. 32-bit versions and Server-core installations do not support this.

Prerequisites
Hardware

Hardware assisted Virtualization Technology enabled in the BIOS
Intel VT
AMD-V
Data Execution Prevention enabled in the BIOS
Intel Execute Disable (XD)
AMD No Execute (NX)

Software

To enable the Role option for Windows Server virtualization a few patches must be installed.

Open an explorer window and browse to %sysdir%\Windows\wsv, usually C:\Windows\wsv. Two files will be located in that folder:

Windows6.0-KB939853-x64.msu
Windows6.0-KB939854-x64.msu
These can be installed in any order. Install both patches and then reboot the system.

Installation

Once the system has completed its reboot you will need to add the Role to the system. Please see Adding and Removing Roles on how to add the role and begin the installation.

After adding the role and clicking next, the Create Virtual Networks dialog box should appear.

Here's where things get a little wierd and attention must be paid as network connectivity will be lost for a short period of time.

Select Local Area Connection which should be your private network adapter. Click continue. The installation will continue and require you to reboot. After the reboot, log into the system via the Public connection. You must log in with the same user as you used to install this.

The Resume Configuration Wizard should start up to finish the installation. At this point the networking protocols that are assigned to the network interface you choose will be unbound. You will lose network connectivity to that interface. If not, you probably recieved the following error:

"Attempt to configure Windows Server Virtualization failed with error code 0x80078000."

To resolve the error, go to Start >> Programs >> Administrative Tools >> Windows Virtualization Management. This is the new management console for Windows Virtualization.

Click on the server in the right hand pane. Then in the action pane, click Virtual Network Manager. This will bring up a new dialog box, Virtual Network Switch Management:

In the left hand page click the network switch under Add New network switch.

Rename it to private and for Connection select Physical network adapter and select the 1st network adapter. After this, all network protocols will be unbound from the private network interface.

IMPORTANT PART In order to re-establish network connectivity to the private side we will need to configure the new switch device and NOT the private interface. Go to Start >> Settings >> Network Connections. A new device called Local Area Connection 2 should appear and its device is a switch.

Right click this item and go to properties. Select ipv4 and its properties. You will need to configure this device with the private network interface ip address, netmask, and dns servers. After this is complete, click ok and close. This should re-enable networking on the private side. Verify this by pinging the private ip. 

RDP to the private IP to setup the public network.

Adding a public switch is the same as adding the private one. Go back to Virtual Network Switch Management and select Add new network switch, select external as the network switch type and click add. Rename the switch to Public, select Physical network adapter, and then select the second network adpater. Click ok. This will cause the public port to not respond anymore to the network. Configure the new public switch interface just like you did with the private one with the proper settings.