I am partial to VirtualPC for setting up and running test environments. You will need a exteremly solid box, but can be worth it.
We had to perfect an install of some old client software(e.g. listed as needing Win95) on XP. We needed the software and were not going to be hundreds of thousands to the vendor to upgrade our server that we are replacing (with a different vendor) at the end of the year. In comes Virtual PC.
I fully configured a virtual XP machine (you need to install media, I recommend it as an ISO as you can mount them as a drive). Once everything is setup I stopped the virtual machine, commiting the changes. I saved off a copy of the configuratin (1 large file represents the whole computer) for use again in the future.
Then I restarted and installed. I took detailed notes through the install and noted any problems. Once done I shutdown the virtual machine and did NOT commit the changes. Based upon my notes I repeated this process, making slight variations and noting them, until I had a method of doing a clean setup (which consisted basically of doing the installer, putting in place an updated DLL, copying over a bunch of files from a Win95 install and tweaking a boat load a path items).
Doing this saved having to ghost a machine and repeatedly applying the image; by not saving any configuration changes you can eliminate the garbage from any previous tests. Installs, imports, configurations, anything you would want to try repeatedly to see what affect it has.
I would recommend looking into Virtual PC more to see if it fits your needs.