Using Windows Server 2012 Hyper-V Manager, you create a Virtual Machine with a VHDx hard disk using the New Virtual Machine wizard.
You install Windows Server 2008 R2 as guest OS on the newly created Virtual Machine. Following the install, EventID 412 and EventID 257 are logged in the Application Event Log of the guest OS.
Certain applications and components, especially database and catalog, are aware of the physical sector size of the disk that they reside on. When these are moved to or installed on a physical disk that doesn't have the same sector size as the one that they were initialized on, they will choose to do the appropriate action which may include logging an event to communicate the impact. Windows Server 2008 R2 has internal database and catalog components that will generate an error installing on an Advanced Format drive because Windows Server 2008 R2 RTM install media was prepared using a system that had a physical sector size of 512 bytes.
The VHDx hard disk created by the New Virtual Machine Wizard on Windows Server 2012 will be Advanced Format and will have a 4 KB physical sector size and a 512 byte logical sector size.
If Windows Server 2008 R2 install media with the hotfix from KB 982018 or with SP1 is not available, use the New Virtual Hard Disk Wizard to create a VHD and manually attach it to the virtual machine. It is also possible to use the use the New-VHD Hyper-V Cmdlet in Windows PowerShell to create a VHDx with a virtual hard disk with a physical sector size of 512 bytes as shown in the following example:
new-vhd -path D:\VHD\vhdx512.vhdx -sizeBytes 100GB -PhysicalsectorSize 512 -dynamic
If a VHDx was created with a physical sector size of 512, it would not be considered Advanced Format and installing Windows Server 2008 R2 without the hotfix from KB 982018 or SP1 would be supported. When creating a VHDx with a physical sector size of 512 bytes that is greater than 2TB, the same NTFS file system limitations that apply to a similar physical hard disk would apply to the VHDx virtual hard disk.
For more information on the Microsoft support policy for 4k sector hard drives in Windows, see KB 2510009, http://support.microsoft.com/kb/2510009
For more information regarding application EventID 412 see KB article 2470478, http://support.microsoft.com/kb/2470478
For more information regarding Application EventID 257 see the following TechNet article:
Article ID: 2786376 - Last Review: Nov 30, 2012 - Revision: 1