You can create a VHD from the Disk Management Console
Greg Shultz is a freelance Technical Writer. Previously, he has worked as Documentation Specialist in the software industry, a Technical Support Specialist in educational industry, and a Technical Journalist in the computer publishing industry.
I too am a bit paranoid, and keep a few external hdd's in rotation. I wouldn't bother with a .vhd, as that would seem a waste of space to me (if that hdd crashes, you can't recover from that .vhd anyways). I make a total backup of all the folders I want to back up to the external, then use a synchronize program... Total Commander "Sychronize" function every few days and the process is fairly quick, and it copies any new files it finds, and also removes any I've deleted, etc. I do this same procedure to a rotation of 3 externals, and change to a new hdd every week (or two). Just another approach, but I can't see how managing another hdd in the middle of this would solve anything myself. /Fred