I created a Hyper-V VM on my Windows Server 2008 Standard machine. On The VM I loaded Windows XP Home with SP3 from the MSDN ISO. Everything works perfectly until I attempt to change the VM resolution from 800x600 to something larger like 1024x768 or 1920x1200. The symptoms are that the screen turns black and the VM bounces in resolution back and forth between the 800x600 and whatever resolution I set it at. When I set the resolution back (by waiting the 15 seconds without confirming), the problem stays. After shutting down the VM and restarting, the problem still exists, even if I didn't save any settings!
I assumed it was the VM Installation so I removed it and re-installed and it was fine until I attempted to change the resolution.
here is an example of the symptoms: http://screencast.com/t/370hzAlwY