My three favourite Windows 7 features are the taskbar, default printers network-by-network, and boot to VHD. That's cheating really because "the taskbar" covers a lot of ground - jumplists, previews, previews with buttons in them (pausing media player, closing anything), notifications, and progress bar overlays. As you can see by all those links, I've already blogged most of those features - and most of my Windows 7 category is taskbar-relevant.
But I haven't yet blogged about boot to VHD and I really need to. The rise of VPC over the last few years has made such a huge difference for me and my tribe. Whether it's a safe place to put a pre-beta (typically the uninstall instructions for CTPs and private builds are "format your C: drive") or a carefully configured TFS or Sharepoint setup, a virtual PC is a great place to play or to demo a technology. The only downsides are performance, and sometimes access to hardware peripherals or networking. Boot to VHD fixes those two downsides, and it's better than having a separate laptop or a slide in/out hard drive (a solution I used years ago on the only laptop I've ever met with that capability.) Not only does it weigh a whole lot less than a separate hard drive , you can access the "host" hard drive while you're booted over to the guest. That means I can work on a demo or presentation and leave the powerpoint or the demo script on my "real" drive and edit them from the guest.
The only downside is that it is boot to VHD. Not "put the host machine to sleep and then bring up the guest machine." So you have to be prepared to close all the apps you have open, which for me can take some doing. But that's the only problem.
How to do it? I followed the nice clear instructions by Adrian Kingsley-Hughes. Print them out, because you're not going to have access to your machine while you're doing this. Scott Hanselman has a similar set of instructions, but they're not identical and I didn't follow them myself, so if you want to, just remember like he says "This is advanced and may hurt you, your computer, or your cat" so don't complain to either of us if something bad happens. He has nice pictures and some links to useful references too. If you really want to wander into "Danger Will Robinson" territory, take a look at Jon Galloway's post which covers the whole "wait, what about activating my copy of Windows?" story. I'm just ignoring that myself since most of these virtual machines are going to live for a month or so.
If you're running Windows 7 Ultimate, and you ever install beta or pre beta software, or otherwise ever use a virtual machine, learn how to do this. You won't be sorry.