Windows 7 and Windows 2008 R2 has the possibility to boot from VHD. Ideally this will make your VM run with the smallest overhead possible from the host system. It should be interesting to try out Windows Server 2008 Server Core and see how much is the memory footprint. Actually this article “Deploying and Maintaining Server Core” claims that the actual footprint they have is 1.6GB HDD and 180MB RAM.
Find out how to make Windows 7 and Windows 2008 R2 boot from VHD file in this step by step guide “Windows 7 – Natively Booting from a .VHD file (Virtual PC image)” and in the video Windows 7 VHD Boot Demonstration.
There are some restrictions though. Watch out for the following:
as stated in the article “Windows 7 Boot From VHD”.