A new release of Ubuntu has just come out, so let's put it through the paces in Virtual PC 2007! First of all, the old install problems (chronicled here) still exist. The Ubuntu installer boots up into 24-bit color, which is not supported by Virtual PC. If you start with the Start Ubuntu in safe graphics mode option, you will be able to see the installer screen just fine (with some ginormous icons), but unfortunately, the mouse is not recognized at all. I really had hoped this would be fixed!
That's fine... Mike has the fix here: http://blogs.msdn.com/mikekol/archive/2007/08/06/making-ubuntu-7-04-work-under-virtual-pc-2007.aspx