I tried to install Lonhorn Server Beta 2 as a host in Virtual PC 2007 but received an error message and setup wouldn't continue.
I just so happened to be trying to use VPC 2007 instead of VMware workstation since I'm only using an eval copy of VMware. I have no problem installing as a host in VMware. In fact it installed and was up and running in like 30 minutes.
I was going to try the new CTP version in VPC 2007 to see if there is a difference.