Installing VM Additions on Windows Server 2008 Server Core
I am preparing a Virtual Server image for my presentation on Windows Server 2008 Server Core at the Microsoft Technology Day to be held on March 30th at Kuwait.
I had to install the Virtual Machine Additions on the guest machine to accelerate the overall performance, and specifically to improve the video and cursor movements.
On Virtual Server 2005 R2, I click on the “Click here to start Virtual Machine Additions setup” link. This mounts the VMAdditions ISO image file to CD-ROM drive on the guest machine. It is important to note that the VM additions does not autorun.
You will have to go to the CD-ROM drive manually at the Command Prompt and execute the D:\Windows\setup.exe file where D: is the drive letter of the CD drive on the guest machine.

For some reason, I see that the host key doesn’t work with Windows Server 2008 guest machines. Does it work for you? Comment..
No, it was because I’m running IE 8.0 beta.
Disable the Sound Card on the Server Core VM and try the installation again