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In windows 7 it is pretty simple to boot directly to a VHD, given that it also contains (or you are going to install) Windows 7 (or Vista/Server 2008).

This installation is made possible I believe by the fact that from Vista on, Microsoft is using WIM (Windows Imaging Format) for OS installation.

Is there a way to install XP to a VHD on Windows 7? Or is there a way to create a WIM image of the XP installer?

Some have claimed to be able to do it in different blog posts, but there are no explanations of how to achieve it.

jvanderh
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No, only Windows 7 / Server 2008 R2 can boot from vhd as far as I can tell. It makes some sense that the operating system itself has to be aware of how to boot off and live on a vhd without any other virtualization going on hiding that fact for it.

Installing XP on a vhd as a virtual machine is another matter and very easy - but you won't boot the bare-metal hardware from it.

After some searching an interesting approach (though not what you asked for in any way) is installing the Windows 7 boot loader on a Windows XP system - and then booting Windows 7 from vhd, having XP installed as normal.