Disk2vhd is a Microsoft utility for Windows PC that creates VHD (Virtual Hard Disk – Microsoft’s Virtual Machine disk format) versions of physical disks for use in Microsoft Virtual PC or Microsoft Hyper-V virtual machines (VMs).
The difference between Disk2vhd application and other physical-to-virtual tools is that you can run Disk2vhd on a system that’s online. The program uses the built-in Windows Volume Snapshot capability to create a consistent point-in-time snapshot of the disk, including the operating system, applications, and data. You can even have Disk2vhd create the VHDs on local volumes, even ones being converted (though performance is better when the VHD is on a disk different than the ones being converted).
Virtual PC supports a maximum virtual disk size of 127GB. If you create a VHD from a larger disk it will not be accessible from a Virtual PC VM.