How to install OSX into VirtualBox on a Macbook Air using Apple's Reinstall USB

I got it working by booting from my physical partition. Doesn't exactly answer my original question but it works.

The are two ways of doing it:

  1. Converting the physical partition into a vdi (VBoxManage convertfromraw ...)
  2. Accessing the raw partition directly. I also made it immutable so that VirtualBox puts writes into a separate file - makes me feel safer since raw access is supposed to be quite dangerous (i.e. it's easy to damage the OSX install).