Now that I switched to Ultimate, I am running Windows 7 Ultimate on my work laptop from a VHD. I am able to boot back to XP if needed, and my original harddrive is now my D: drive. it's great. IT is happy because I didn't muck with their image. I'm happy because I'm running Win7. All is good.
Here's how I did it:
http://www.sevenforums.com/tutorials/2953-virtual-hard-drive-vhd-file-create-start-boot.html