Microsoft allows all versions of Windows Vista to be legally virtualized.

Redmond, WA.  Earlier today Microsoft announced that it was loosening the user agreement restrictions that prevented end users from running Windows Vista basic and Home Premium editions in virtual machines.  The change is expected to open the door to smaller companies and end users that want to run the cheaper editions of Windows in a virtual environment. Previously, users were only allowed to run Business, Ultimate and Enterprise versions of Windows Vista virtually.