Many have reported this error and others have drawn the correlation between the error and the size of your virtual HD. I’m going to bring the two together.
Since we are talking about Beta bits there are several “issues” to work around in order to get a good install of Vista Beta 1 up and running. In previous posts you’ve read that there are several workarounds for the “RAW” disk problem. You can basically “Choose your own adventure” by either formatting with XP or 2k3, diskpart with SHIFT-F10 or just let the installer do it all but with a kind re-boot in the middle. They all accomplish the same thing.
Here’s the thing, and I’m not sure I understand why but if you create a virtual HD in VMware for your Vista install and give it anything less than 8.0 GB it will fail. 4GB the install won’t even leave the starting blocks. If you give it 6GB the install will start only to stop with the error above. Try 7GB and the error above will crop up once again. The magic number appears to be 8GB. If you give your VM at least an 8GB virtual disk it will complete the install.
Now, why you may ask. I’m interested in this as well. We know the installer checks for minimum disk space, that is apparent if you try to install with a 4GB disk. Since VMware doesn’t magically shrink an expanded disk we know it’s not about temporary disk storage during install or the completed install would leave a virtual disk file of 8GB instead of one at 2GB(if my memory serves me correctly). My guess is an installer flaw or bug. The graceful notification of a 4GB disk being too small tells me that the installer was built with a disk space requirement around the 4–5GB range. The hard crash of the installer at disk sizes between 4GB and 7GB lead me to believe it is an installer oversight/bug. Any way you slice it you must at least give it 8GB.
NOTE: This was written for Vista Beta 1. The comments below will help with respect to more current beta's.
If you are attempting to install Vista Beta 2 in VMware the reported minimum size is 16GB for your virtual disk in order to avoid the error. - Thanks Robert, Mondo and any others I missed