Windows Deployment Services (WDS) was vastly improved over Remote Installation Services (RIS) from Windows 2003. With the introduction of the original release of Windows Server 2008 WDS could deploy operating system images based on the new, versatile WIM file format. And WDS could do multicast as well as unicast deployments. With Windows Server 2008/R2 WDS has been enhanced again.
WDS now supports multicasts and unicasts of VHD based installations of Window 7 Enterprise and Ultimate. Windows 7 Enterprise and Ultimate both support installation into a single VHD file instead of a traditional partition-based installation. The VHD is created using Diskpart or Disk Management and a boot entry is created using Bcdedit. When Windows 7 installed using this method it is still a physical installation of Windows, that is, Windows has direct access to the hardware. VHD files are also used by virtualization platforms such as Hyper-V and Virtual Server 2005 but this native installation is very similar to a traditional installation of Windows with only a 2% performance cost. The advantage of a VHD-based install is the flexibility of the format. A single drive volume can contain multiple VHD each with its own copy of Windows. VHDs are easy to backup and can be copied as a single file from one computer to another. All that is necessary is to create a boot entry with Bcdedit and the VHD can boot in its new home.
WDS multicasts and broadcasts of VHDs cannot be managed from the graphical WDS management console. The command-line Wdsutil must be used instead. Wdsutil command parameters can specify unattend.xml scripts that will automate the WDS client installation phase and the later Sysprep specialization phase of setup. These scripts are best written using the Windows System Image Manager program found in the Windows Automated Installation Kit (WAIK).
A good reference for WDS based deployments of VHDs can be found at: