Ben Armstrong, Virtualization Program Manager from Microsoft has a blog about installing Virtual Server on  Windows 7.

First off, Virtual Server for Windows 7 isn't supported, he says. And if you need a virtual server solution for Windows 7, then Microsoft recommends using Hyper-V in Windows Server 2008 R2.

But if you still feel you need Virtual Server for Windows 7, there are some workarounds, but they do have some limitations.