You will find vhd booting possibility:
1. Virtual booting
You can create multi partitions inside a vhd file.
All iso, img, vhd, frugal and full install systems will work.
Just use virtualbox and grub4dos.
Virtual booting in a multi-partitioned VHD - YouTube
2. Real booting
Windows vhd (xp, 7, 8) of course will work ok.
Linux will boot also in vhd, but only frugal install and no write ability in vhd (just work like you boot linux from iso).
Some linux distros work fine like: taz-chrome, lps, 4m, puppy, porteus etc.