I was running into a problem with copy and paste not working. I tried a number of different things but eventually found this post that fixed the problem.

http://blog.wpfwonderland.com/2007/05/29/fix-virtual-pc-clipboard-stops-working-on-host-pc/

It was caused by Virtual PC taking over the clip board. This fix is a little haxxor, but it does the trick.

Also found a great little utility that will tell you which process has locked the clipboard:

http://windowsxp.mvps.org/temp/GetOpenClipboardWindow.zip

Shendy.