for all my images (Just win 7), i shrink the C drive to as small as it goes in disk management, sysprep, fog prep.
images are stored as multi partition ntfs.

never had a problem.

Hi, i have tried it with the Win8 dev preview its the same as win7. have not had a problem with it.

Hi, i have fog 0.32 running on ubuntu 11.10 desktop in a live environment. everything was easy to setup.