if you've encountered this:
"I upgrade my install of Virtual PC to Service Pack 1 and now all of my Virtual Machines momentarily hang at times. It is like the machine will freeze for a few seconds. Has anyone else seen this behavior?"
You're not the first. This is starting to appear in many places. Looks like it maybe a real bug with SP1 for VPC. the best advice I can give right now is to uninstall the SP and wait for them to release a better one. Her'es to hoping!