Windows 7, 8 (and server 2008r2) allow you to boot them natively from a vhd. The steps to set this up are readily available on your favorite search engine. Where your search engine might fail you is if that VHD happens to be dynamically expanding, and you do NOT want it expanded to full size.
Here is the registry setting you are looking for – this will prevent windows from expanding the vhd:
You can load the registry hive in another instance of windows, or even from the windows install CD.
You might as well change it in all the ControlSets
Change the value from 1 to 4.