VMWare Player 3.0 has some very interesting features.
You can now create VMWare Virtual Machines from within.You don’t have to use VMXBuilder .It supports Windows XP Mode without Hardware Virtualization.However this does not work on Home editions of Windows 7 and earlier versions of Windows.

ImDisk is a virtual disk driver for Windows NT/2000/XP/2003/Vista/2008. It can create virtual hard disk, floppy or CD/DVD drives using image files or system memory.