Well it was either the Floppy being enabled in the BIOS with no floppy installed or your suggestion od the CD/DVD. I disabled the floppy in the BIOS then in the VM as well as the CD/DVD inthe VM for now. I tested with a fresh install of Win7 on a spare disk and all was well. So I upgraded to 5.0.1 on my regular setup adn things seem fine.
I got the idea of the floppy when I went to install Win7 it was taking forever. Found a ref via Google...
Thanks