Microsoft Virtual PC 2004 Service Pack 1

To roughly zero fanfare, Microsoft has released Virtual PC 2004 SP1.  It fixes a number of issues including the performance problems with XP SP2 in a VM.  Be sure to shut down all of your VMs prior to installing.  Apparently VMs in a “saved state” are incompatible between RTM and SP1.  There’s a new version of the VM Additions as well.  I have installed it and it seems to work great.

http://www.microsoft.com/windows/virtualpc/default.mspx

(Thanks to Steve Ognibene for this contribution)

UPDATE
Its worth mentioning that this update will distrupt your network connectivity (both wireless and wired) during the installation process, but then return it to normal upon completion.

The readme file is available online at:
http://download.microsoft.com/download/6/9/d/69de9b67-6498-41fb-9add-95ceab6eb5cc/readmesp1.htm

This file discusses the changes and enhancements in Virtual PC service pack 1.