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Im trying to install ubuntu on window 7 virtual PC, when I boot to the ubuntu ISO image just before the partitioning stage where ubuntu confirms you have at leaset 4GB hard drive space the installer puts a cross on requirement indicating system does not have required amount of space...

however I have a 220GB hard drive with 20GB used to create the virtual disk..Its all a bit weird as I can't seem figure it out

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Probably the disk hasn't been allocated any space and ubuntu doesn't understand Virtual PC formats. Try using VMware Player or Virtualbox. –  nikhil Nov 28 '12 at 8:09
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I haven't touched Virtual PC for ages, but here are my 2 cents (based on VirtualBox, should be similar):

When creating a new virutal machine you create a new virtual HDD, normally I would specify it as dynamically allocated instead of fixed size. So check your Virtual PC VM's settings and make sure you have a virtual HDD meets the minimum requirement. Also during the install process, make sure you choose the right virtual HDD.

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Looking at the dmesg output: ata_piix 0000:00:07.01: >version 2.13 ata_piix 0000:00:07.01: >Hyper-V Virtual Machine detected, ATA device ignore set

Kernel was already patched ... but I guess we need a new Ubuntu release for it to work. https://patchwork.kernel.org/patch/1473491/

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FYI: Don't try upgrading our 12.04.1 to 12.10 if you are running in Virtual PC. The kernel used after the upgrade still doesn't have the fix, so you system will not boot. –  Jeppe Oland Jan 3 '13 at 23:02
    
You can also hit in the installer F6 and add "ata_piix.prefer_ms_hyperv=0" as described here: unquietwiki.blogspot.com/2012/08/… –  Jeppe Oland Jan 4 '13 at 5:57
    
But I should add that I have so far been unable to install a stable Ubuntu in Virtual PC. It either corrupts the HDD image, randomly segfaults or corrupts the malloc heap, or spontaneously quits Virtual PC while booting the VM. –  Jeppe Oland Jan 4 '13 at 5:59
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