Microsoft's Virtual PC 2007 Release Candidate 1 is available for download via Connect. The Redmond Company has invited all the Virtual PC 2007 beta users to head over to Microsoft Connect and download the 28 MB release.

Virtual PC 2007 Release Candidate (32-bit) build 6.0.142, and Virtual PC 2007 Release Candidate (64-bit)build 6.0.142 are available but only to Connect users. Microsoft revealed that Virtual PC 2007 RC1 introduces support for Windows Vista as both the host and the guest operating system.

Additionally, the release introduces support for hardware-assisted virtualization and for network installations. 64-bit operating systems are limited to running as the host OS as Virtual PC 2007 Release Candidate 1 does not deliver support for 64-bit guest operating systems. Users of Virtual PC 2007 should be aware of the fact that Saved States are not compatible from the Beta build to the Release Candidate 1 version.

The Virtual PC 2007 Release Candidate 1 contains the Virtual Disk Precompactor, a utility that will enable users to compact a virtual hard drive by zeroing out all the available space on the virtual hard disk.

There are a few issues related to the Virtual PC 2007 RC1, and Microsoft has delivered the solutions to tackle them. One such problem is related to the Virtual Machine Additions and a guest Windows Vista. The drag and drop function will not work, unless users remove all prior versions of Virtual Machine Additions. Microsoft additionally provides a hotfix for problems with AMD hardware-assisted virtualization support and a 64-bit Windows host operating system.

Microsoft additionally informs that, immediately following the installation of Virtual PC 2007 RC1, the drag and drop feature between the host and the guest operating systems will only work after the host OS will be restarted.