For my particular issue, right clicking on IE and running it as an administrator solved the immediate issue, I was up and running, able to create Virtual Machines and reconnect previous ones -- but that is only part of the story. You might want to follow the steps presented in the blog entry listed below as well, most people know about changing the IE 7 settings on their credentials, however the Virtual Server setting is a little less known.

From the blog:

When you are running Windows Vista, you have the added complexity of having to run the Administration Website in Internet Explorer as administrator when User Account Control (UAC) is enabled. If you are running in an isolated test environment, you can avoid this additional step by disabling UAC. Otherwise, follow these steps to grant your user account full administrative privilege in Virtual Server and eliminate the need for UAC:

• Right-click the Internet Explorer icon in the Quick Launch section of the task bar, and choose Run As Administrator from the menu.
• In the User Access Control dialog box, click Allow.
• In the Internet Explorer address bar, type in the URL to the Administration Website.
• In the Virtual Server navigation menu, click Server Properties.
• Missing Step for VS 2005 R2: Click Virtual Server Security link located in content pane
• Click the Add Entry button.
• In the new Permission Entry, type in your account name in the User Or Group text box.
• In Permissions, select the Full check box to give your account full control.
• Click OK.

Full Blog post:

http://vscommunity.com/blogs/virtualzone/archive/2007/11/28/virtual-server-2005-r2-common-issues-and-tips-always-prompted-for-credentials.aspx

Developers using Vista have some minor adjustments to make with the new security model in Microsoft's latest operating system. One of the first annoyances you might notice after installing SQL 2005 (I'm running Developer Edition), is that you will get permission errors when trying to create a new database. Luckily, there is an easy way around this using one of the new management features in SQL 2005: the Surface Area Configuration Tool. Simply launch this from All Programs > Microsoft SQL Server 2005 > Configuration Tools > Surface Area Configuration.

You will get the screen below; what we want to do is click on the "Add New Administrator" button.

Our next screen recognizes that we are on a Vista machine. In my case, I have two instances of SQL 2005 Developer edition on my laptop. Select one of both and move it across to your privileges to be granted. Click OK. You are now configured and will be able to create databases on your selected SQL instances.

My laptop, by default, came with SQL Express installed. I had worked on a few items before I noticed the need for Developer edition to test some extended functionality in SQL. After uninstalling SQL Express and installing Developer edition, I went to reattach my databases and got the following error:

This did not make a lot of sense – the SQL service is running under Local System, which has full permissions to the Data folder where all the database files are stored. What appears to have happened is that Vista reset the permissions on the existing files (i.e., my old databases) during the install, and these files did not inherit the permissions from the Data folder after Developer was done installing. Don't be tempted to tell all files to inherit permissions from the Data folder, as it is marked as read only and this would cause you other problems – apply the appropriate permissions to the database files and then you will be able to reattach without issue. It's a strange quirk of Vista, one that XP does not have, but still workable.

I'm re-purposing my Dell Dimension E510 and trying it out as a full media center machine using Windows Vista Ultimate. I have Vista Business on my work laptop currently (mixed reviews in using development tools and VPN connections). I'll post how the work goes and what issues I run into in making it work for recording shows, using surround sound, T.V. and general media use.