If your virtual machines consistently hang or your keyboard and mouse behaves irratically, you can try one or more of the following remedies:
First of all, if the virtual machines are hanging, make sure you've got enough available memory and CPU for the combined requirements of the currently running virtual machines as well as the host. If there aren't enough system resources available, then turn off one or more virtual machines.
If the virtual machines are running on a Dell notebook computer with SpeedStep power management, go to the Dell Web site and install the latest version of the SpeedStep utility (http://support.dell.com/). If this doesn't work, try removing SpeedStep by using Add or Remove Programs or disabling SpeedStep in your BIOS. If you don't want to remove or disable SpeedStep, you can use the "Always on" Power management profile on the notebook computer.
If you haven't updated your Virtual Machine Additions, but you've upgraded Virtual Server from a pre-release version, or if you created the virtual machine in Virtual PC, install the release version of Virtual Machine Additions. For instructions, see the Virtual Server 2005 Administrator's Guide.
If you are running an anti-virus program, add *.vhd, *.vsv and *.vud files to your exception list. Be aware that the list may be reset when you upgrade your anti-virus program.
Log on as a different user to see if the problem goes away. If it does, your Windows user profile may be corrupted, which can cause the system to lock up when you right-click an item in Windows Explorer. See this KB article information about this issue: http://support.microsoft.com/default.aspx?scid=kb;en-us;555021&Product=winxp
If you're using Virtual PC 2004 with a European keyboard, the keyboard may lock up when you type Alt+G+R to create a backslash. To fix this problem, install Virtual PC 2004 SP1, which you can download for free from: http://www.microsoft.com/downloads/details.aspx?familyid=b07c9ef0-265a-4237-ae3b-25bc8937d40f&displaylang=en.
On Virtual PC 2004, you will probably experience performance issues with virtual machines running Windows XP with Service Pack 2. This is because XP SP2 was finished after Virtual PC 2004 was released. To fix the problem, install Virtual PC 2004 Service Pack 1. You can download it from http://www.microsoft.com/downloads/details.aspx?familyid=b07c9ef0-265a-4237-ae3b-25bc8937d40f&displaylang=en.
Verify that your hardware acceleration setting is set to full (right-click your desktop, click Properties, click the Settings tab, click Advanced, click the Troubleshoot tab.)