are you running it in compatibility mode?
Sorry to hijack here but I'm having a similar problem.
I'm trying to relive my small child years by playing my favorite game Lemming's, who remembers that?
Anyway, I found it in a charity shop, its a '95 disk and when I insert it into my XP computer, it doesn't register as a game at all. I have to open up all the files and I get lots of game icons and photoshop files of the levels and a few sound things for WMP
Now, is there anything I can do to make it run or is it a case of I have to forget about it and carry on living the current days
I am not sure about MS Virtual PC needing a retail copy of Windows 95 like VMWare does.