One of the new features in Windows 7 Pro, Enterprise and Ultimate is the ability to boot from a virtual hard disk (VHD). But you may find that if the VHD is too large, it will crash the computer with an error message that says "A problem has been detected and Windows has been shut down to prevent damage to your computer. An initialization failure occurred while attempting to boot from a VHD. The volume that hosts the VHD does not have enough free space to expand the VHD." This only happens when the VHD is configured to dynamically expand. You can read more about it here
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