I've run the Android emulator inside a VM before.

If you do give a try on VBox, please report the result here to inform everyone. So if you still want to try WP SDK 7.1 on VM, why don't you try VirtualBox? My current VBox is installed with Windows 8 and have no extra space to reinstall the win7+WPSDK. I'm not even experience any lag (my macbook is i5, 4GB ram, the VBox setting is dual core, 2GB ram, note that no other heavy mac process is on the run, so I solely run the VBox. Surprisingly, the emulator works fairly well and showing the app I've developed. I create new WP project, arrange UI, make some codes as usual, then run it in emulator. I just do a regular install of Windows 7 Home Basic (any Win7 except Starter will do, CMIIW) in the VBox with no tweaking at all, install the GuestAddition inside win7 (provided by VBox), then install the SDK. I'm not so sure about compatibility for long term development, but in last september, I remembering trying the Windows Phone 7.1beta SDK on VirtualBox (I'm using mac SL), a free virtual machine from oracle (previously by Sun) and it works well there. Dual-booting into Windows (using Boot Camp on OSX) is stil the recommended method of developing for the Windows platform, especially if you want to use Hyper-V guest VM's. Note: Running Windows & Hyper-V inside a VM will be slower than running natively. the Windows Phone 8 Hyper-V-based emulator) in VMWare5 or Parallels desktop 5: Here's a guide to how to run Visual Studio 2012 & Windows 8 SDK (inc. This is particularly useful for those wanting to develop against the Windows Phone 8 SDK which runs Windows Phone 8 guest VM's on Hyper-V. VMWare5 & Parallels Desktop 8 now support running Hyper-V guest VM's.

Of course, the chances of the emulator then working as expected with no residual issues is as close to nil as makes no difference ) If you want to have the emulator run from within a different VM to the one MS provides, then you're into the realm of extracting images, toggling bits and trying to tack it into your VM of choice. The WinPhone7 (and WinPhone8) emulator is itself a VM and few (if any) general-purpose VM's will host another VM infrastructure, which is why it crashes Parallels etc.

Windows phone emulator mac