How I had Virtual PC 6 set:
New Virtual HD ready to install Linux on.
Memory settings set at 128+MB
Boot from CD Allowed.
I had:
One Knoppix CD burned with Roxio Toast from the most recent ISO in my internal CDROM
One Graphite iMac DV SE g3/500mhz running 10.3.5
What I did:
Booted the Linux ready virtual drive which started off the CD.
Typed in knoppix at boot
waited forever to get KDE to load (You don't need the Virtual additions (I didn't at least)
used the Konsole to run sudo knoppix-installer
used formatting software built in the software to make a root and swap partitions
followed the wizard's instructions (chose knoppix install instead of debian)
went to watch The Complete Works of William Shakespeare Abridged
came back and it was installed