"If you look at the OS support it is not supported."
I would suggest that you probbaly do more research - we are not talking of any OS Support. TS is running on a XP machine so I am really not sure what are you talking about when you mentioned that. Al lI am trying to do is to store the files generated by the Microsoft Virtual Server R2 ( vhd and vmc) on your TS and run access the virtual machines store on teh TS. Not a big deal.
Anyway, I found a workaround for those intrested: save the vhd files on teh TS and the vmc files on a locla drives. This way, the necessary permissions will be applied on the configuration files and Virtual Server will run.