This was very useful when I needed to test some of the things I created on a different server, a Windows 2003 server running Windows SharePoint Services for example.
After I had created my Windows 2003 image, I could use it on any PC I wanted to work on, on my laptop and on my desktop as well. This proved very useful when having to test against a specific machine.
A virtual PC can share its network with the host operating system, making it possible to run several virtual machines at one, simulating a complete network, acting as if it were unique servers on the network. This was a very nice feature before deploying something to the real production servers.