Best way to "virtualize" existing system?

Solution 1:

  1. For converting the physical box to a virtual machine: VMware Converter. There's even a free version.
  2. For creating variations: Use linked clones to create a bunch of instances of that base machine, changing the RAM on each. You'll have to do a bit more work to change the disk size as you'll have to change the partition size and resize NTFS. I usually use sysrescuecd to do this to Windows virtual machines.

Solution 2:

You may run into problems verifying the Windows license when you start the new instances of your VMs.