A virtual hard disk (VHD) is a file that is used as an image of a hard disk in Microsoft Virtual PC or Microsoft Hyper-V machines. Usually you have to create a VHD through the Microsoft Virtual PC software, when you install an operating system in it. Some of the trial VHDs are also available for download from the Microsoft website. But if you want to create a VHD from your hard disk drives, then you can make use of the Disk2vhd software from Microsoft.
The Disk2vhd is a free utility from Microsoft Windows that can be used to create a VHD image of your actual hard disk. This utility makes use of the Microsoft Volume Shadow feature to copy all the files into the VHD image file even when they are in use. This is why it is better than some other similar tools which need to be run either from a bootable disk or can create VHD images only for the non-Windows partitions.
You can download Disk2vhd from the Microsoft website. The download is a portable application packed inside a zipped archive. You can extract the contents of the ZIP archive to a folder and run disk2vhd.exe from there.
In the application window, you can select a target VHD file which is going to be created. You can also select which partitions you want to include inside this VHD file. You can select one, more than one or all of your partitions. Usually you want to create the VHD file only for your operating system partition so that you can run that VHD inside the Virtual PC. After having selected the partitions, click on the Create button and it will start the process of generating the VHD file.
So if you want to create a VHD from your existing physical hard disks, then you can use the free software Disk2vhd. It can create the VHD of the partitions even when the files on them are on use and programs are running. It works in all versions of Windows starting from Windows XP and above (because the Volume Shadow service is available only in Windows XP and above).
You can download Disk2vhd from http://technet.microsoft.com/.