Viruses can infect not just physical machines but virtual ones too, so if you’re running Virtual PC or Virtual Server on a box in a production environment (or any environment with Internet connectivity) then you should install antivirus software on both your host OS and all guest OSes as well. However, on the host OS you should exclude virus scanning for certain types of files to ensure that your VMs don’t take a performance hit. These excluded file types include *.vhd, *.vud, *.vsv, *.vfd and *.vmc files.