Virtual Server 2005 R2 on Windows 2003 Server with Sharepoint 2007 Office Server

I has been impossible for me to get sharepoint 2007 up and running on any of our development servers. What I was able to do was to install Virtual Server 2005 on my desk top and then load sharepoint 2007 in that environment.
NOW, what I a am trying to do is load Virtual Server 2005 R2 on a development server that has MS server 2003 but I am unable to get the Administration website to display. When I try to display the Admin. page I receive a 403 error - You are not authorized to view this page. The install option for virtual server was "configure the adminstration web site to always run as the authenticated user" selected. When I change the install option ov Virtual server to "Configure the Administration Website to always run as the local system account, I do get the Administration website to come up but I receive the errors:

The following error occurred:
LsaLogonUser() failed! Logon failure: unknown user name or bad password.
The event messages could not be generated because a necessary file was not found. Please reinstall the Administration Website.
I am using a Remote Desktop Connection to connect to the server.
ALSO, everytime I install Virtual server 2005, I recieve a popup stating : desktop is not accessible. You might not have permission to use this network resource. Contact the System admin. to find out if you have access permissions. Configuration information could not be read from the domain coltroller, either because the machine is unavailabel, or acceess has been denied.
I am pretty sure I have admin rights on the server but I could be wrong.
Please, I need a creative solution to a unique problem and I can't find a fix anywhere on the web.
Thanks much for you help and ideas!!!!
[2193 byte] By [whatawildridethisis] at [2007-12-31]

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