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I recently installed Ubuntu Desktop 12.04 to dual-boot using Wubi, so the system files are inside C:\ubuntu and, on boot, I can choose which OS to use.

Since the system files are located in the windows partition, is Windows (7) running in any way, somewhat like a virtual machine would? Or does Wubi and Ubuntu ignore the Windows operating system already installed on the C: drive?

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The rest of the drive you are installed on is mounted and you can access files from it (they are in the /host folder). However I do not know about the rest of the question. – namingFailed Jul 6 '13 at 21:26
up vote 1 down vote accepted

WUBI installs Ubuntu on a hard drive image on a Windows partition/file system. It is not a virtual machine, and windows is not in any way running when you boot that Ubuntu installation.

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