There are many people on here. However, I doubt you'll find many with experience with II7 on 64 bit virtualized vista.

For a complete shot in the dark, I'll guess that the problem has something to do with the shared folder you are sharing into the virtual OS instance. Can the system see the drive the way you expect it to? How do shared drives works? Do they show up as mapped drives? Is so, then this might be the problem. Mapped drives are mapped in the user session, not at the OS level so IIS (running as a system service) can't see them. This might be part of the problem.

-Peter
compiledthoughts.com