Harry,
It seems to me that you are making this vastly more difficult than it
needs to be. I am using Xy in Virtual PC7. VPC stores the entire
state of the windows engine with all its installed programs and
Registry in one huge file on the Mac hardisk; Mac OS X views it as a
document file. To make a backup of this, no special image software is
needed. I just drag and drop the VPC file onto some other partition
or external hardisk. If I bugger the running version of virtual
windows, I just delete its file from the Mac hardisk, then drag and
drop the previously stored VPC file back to its original place on the
Mac hardisk. All these issues of 'is it bootable', 'what about
licences' and so on simply do not arise.