If the “Create Virtual Machine” Folder Option is missing in your Windows Virtual PC, then you might want to check this out!
There are four options suggested that you can try to address this issue:
1. Use the Reset Folders option in the View tab of the Folder Options. This has been suggested at msmvps.com.
2. When in the Virtual Machines folder, press “Alt” to open the menu. Select Tools and then Folder options. On the dialog that is opened click Restore Defaults. Once you have done this, log out and log back in to see if the Create Virtual Machine option is now present.
3. If this doesn’t work – try running the registry file that is attached to the blog post at msdn.com, and restarting the computer. This registry file deletes any custom settings for your folder views – and sets things back to their clean state.
4. If neither of these options works – you can manually start the new virtual machine wizard by going to your system drive and running: “\Windows\System32\VPCWizard.exe”
Hope something helps!