Can you install MDT 2010 in a virtual machine and then use it to deploy Windows in your production environment? Yes! MDT doesn't care what the underlying hardware of the system is, or whether the system is physical or virtual, as long as it's installed on a supported version of Windows. But there is one important thing you should be aware of before using this approach on your production network. If your virtual machine uses a dynamically expanding virtual hard drive (dynamic VHD file) then over time this VHD file can expand and become bloated in size. The reason for this is because with MDT you may often be creating and deleting Windows images in your deployment share as the needs of your environment change. For this reason, it's best to use a fixed-size VHD instead of a dynamic VHD for the virtual machine in which you install MDT. Fixed VHD files have pre-allocated sizes and do not expand over time. Just be sure to create a fixed VHD large enough to accommodate all the Windows images you may decide to store within your deployment share.
Mitch Tulloch is a seven-time recipient of the Microsoft Most Valuable Professional (MVP) award and widely recognized expert on Windows administration, deployment and virtualization. For more tips by Mitch you can follow him on Twitter or friend him on Facebook.