Long ago, Innotek ported Connectix Virtual PC to OS/2. This product was lost when Microsoft bought Connectix. Microsoft continues to support Virtual PC on Windows.
The Microsoft Virtual PC Wiki offers more information about Virtual PC.
The hard drives supported by VPC tend to grow, but not shrink. To shrink them, you must first fill the unused space with zeros, then use VPC to compact the hard drive. This is the procedure I use to shrink my Windows 2000 virtual hard drives.
Microsoft has published quite a few security updates for Windows 2000. Unfortunately, not all of them are compatible with VPC. What follows is a list of updates to be avoided, and another list of those updates that are OK.
KB931784 - Crashes at the logon screen.
KB891861 - Crashes before the logon screen.
KB832483 - Won't apply.
KB840987 - Crashes at the logon screen. (Oct, 2008)
KB896423
KB933566
KB935840
KB890830
KB935839
KB927891
KB890046
KB920213
KB927779
KB930178
KB932168
KB925902
KB928893
KB924667
KB918118
KB926436
KB929969
KB923689
KB925398
KB923694
KB923980
KB924270
KB924191
KB923414
KB923191
KB920685
KB917008
KB920670
KB920683
KB921398
KB914388
KB911280
KB917734
KB914389
KB917736
KB913580
KB917953
KB917344
KB908531
KB911564
KB908519
KB904706
KB900725
KB905749
KB905495
KB899589
KB901017
KB896358
KB905414
KB893756
KB899587
KB901214
KB832483
Microsoft VM
KB828026