So I managed to install Windows 8 Consumer Preview, this is how I did it on Windows 7 x64.
1. Downloaded the ISO image and saved to a folder for use later on.
2. Downloaded
Rufus and created a bootable USB using the ISO I had downloaded earlier (this took about 20mins as I selected to check the drive as well.)
3. Navigated to Control Panel >> Administrative Tools >> Computer Management >> Storage >> Disk Management.
4. Selected the 'Action' menu and 'Create VHD'.
5. Selected a location for the VHD file and made a note of the name (e.g. F:\WindowsPreview.vhd as well as the label of the drive) and then chose 20GB and fixed size (because it was recommended.)
6. Right-clicked on the VHD entry below and selected 'Initialize drive'.
7. I then formatted the drive, created a single partition and assigned a drive letter e.g. (V:\ for VHD.)
8. I then made sure I backed up the important information just in case.
9. Noted down what the product key was.
10. Restarted the machine with the USB drive plugged in and selected the option (from the BIOS) to boot from the USB drive.
11. Waited until the screen to 'Install' was shown and selected 'Install' (Don't worry it won't format the drive yet.)
12. Selected the language and keyboard configuration for my machine.
13. Entered the product key I noted down earlier. (IMPORTANT!)
14. At the drive selection I entered Shift+F10 and a command prompt was shown.
15. Entered
DISKPART and hit the return key.
16. Entered
LIST VOLUME and hit the return key.
17. A list of drives was shown, now earlier I had stored the VHD file to the F:\ drive with the label 'Backup'. Now I looked at the list and saw the name 'Backup' but the drive letter was now E:\, therefore I replaced the drive letter F:\ with E:\ thus making the location E:\WindowsPreview.vhd.
18. Entered
SELECT VDISK FILE="E:\WindowsPreview.vhd" (with the quotes) and hit the return key.
19. Entered
ATTACH VDISK and hit the return key.
20. Entered
EXIT and hit the return key. Then I closed the command prompt.
21. I then hit the F5 key to refresh the list of drives and then selected the drive that wasn't there before and had a value of 20GB, though please make sure you select the right drive. (IMPORTANT!)
22. I then continued with the installation as though I was installing to a second partition.
23....26...Windows 8 was installed!
This worked for me and I make no assumption that it will work for you either, so please do so at your own risk. You have been warned.
Source: http://boyans.net/HowTo_InstallWindows8_to_VHD.html (but I did it a little differently.)