The floppy drive issue is also a problem with Virtual PC 2007 It's been a while since I replied to one of the first posts here, but in the meantime I have found that the problems with floppy drives remains, even if the drive is used on VPC 2007 SP1.
VPC 2007 SP1 doesn't have USB drive support, so you have to use a floppy diskette if you want to install an older OS that requires floppies for installation. VPC for windows 7 can't be used, as it has no floppy drive support.
For me to see, the only OS'es that can be installed with VPC under Windows 7 are OS'es that can be installed from a booted CD/DVD.
That leaves Windows 3.1 out, unless a cumbersome workaround is used. OS/2 is completely no go, as it requires install diskettes.
I have the VPC Machines that I care to have, made when I had Windows XP x64 and Vista installed.
I have preserved my full OS/2 system that I had running for almost 10 years, as a VPC Machine, with full setup of Fidonet, mailer tosser scanner nodelist compiler etc.
and all the postings from Fidonet and OS2-Net that I have kept through the years
I'll leave it to somebody else to throw the things out, when I'm gone.
As for the need to use "outdated" floppy drives and diskettes, I know that Windows XP x64 can't be installed without a floppy drive for adding "F6 drivers" as the additional drivers are needed for the installation.
I haven't tried if the issue is there with VMware Player or VirtualBox, yet.
Kind Regards
LDJ