Hyper-V is a virtualization platform that allows for running virtual machines on a host machine. It uses virtual hard disks (VHDs) to store operating systems and applications in single files. Disk2vhd is a free tool that can capture physical machines to VHD files. VHDs can be dynamically expanding, fixed size, or differencing. Snapshots provide point-in-time backups of VHDs. Building a test environment with Hyper-V, VHDs, and snapshots makes it easy to test different operating system and application configurations.