Even though it really isn't bare metal, this screen is sort of the same thing as installing memory modules onto a motherboard. They're just virtual memory modules. But, as long as your virutal machine is active, you can expect your available RAM to be depleted by whatever your virtual machine is set to take (in the case of our VM for Windows XP, 512MB). When you shut the VM down, you reclaim that memory. This is one reason we maxed the memory out in the Thinkpad X60 Tablet we're using for Virtual PC testing.
For David Berlind's write-up on The Virtual PC 2007 Installation Sequence, see his post
in ZDNet's TestBed blog.