I simply need to install Home windows 2008 64Bit on the virtual machine. How you can??? Will I require a special kind of processor? Will I require a "special" virtualization tool? Really installation fails on startup using the message the CPU can't handle a 64Bit system. host system: Home windows 7 64Bit CPU: Pentium D (appears to become Smithfield 805)

You'll need a 64-bit capable processor. VMware / Hyper-V don't emulate Processor chips, they execute in it. You do not mention what hypervisor you are using.

I attempted Virtual PC 2007 and VirtualBox. Installation stopped with following information: File: windowssystem32bootwinload.exe Status: 0xc000035a Info: Trying to load a 64-bit application, however this CPU isn't suitable for 64-bit mode.