The troubleshooting continues from the problems I have been having with Virtual Server 2005 SP1 (see http://virtuallyaware.spaces.live.com/blog/cns!549C424F228D6040!125.entry for the background).
It looks like the root cause to the "Hang" problem is the hypervisor. Not sure who’s fault it is, Microsoft or HP, but if I uncheck ALL the "Enable hardware-assisted virtualization if available" check boxes from the general properties of each guest, the "Hanging" of the guest during startups and save state restores goes away. I also do not get the "Hang" if I disable processor virtualization on the processor in the BIOS. I have a ticket open with MS at the moment and hopefully will get a fix. When I do i will pass it on. I know there is a growing number of you that are seeing similar problems.