I'm not sure for VM Ware but with MS Virtual PC it makes a virtual harddisk. All your programs will be preserved. Think of using a virtual PC as opening a internet browser a screen apears and thats that. It's a program that luanches a screen and boots a "virtual pc" you then log onto windows or whatever you load on it. everything you load on it is saved in a file called "My Virtual Machines" not affecting your "real PC".