I wanted to clarify this common problem – I was asked it a couple of times over at TechEd this year, and I got an email asking the same question last week. The answer is: It depends. If you are using Virtual PC, you must be logged on to the host machine to be able to start Virtual PC and hence run any guests. Virtual PC does not run as a windows service. If you’re using Virtual Server, then you do not need to be logged on to the host machine. Virtual Server uses windows services, and has no user-mode element required for guest virtual machines to run.