VHD for Virtual PC: clarification needed; max size: partition or disk?

I am hoping to bring up an image of my XP Pro box inside Windows 7 Ultimate x64 as a Virtual PC. Originally the boot partition on the XP box was 232GB but I used Acronis Disk Manager to shrink it to 125GB, resulting in unallocated space of 107GB on the HD.

Inside Disk Management console it looks like this on the XP box:

................primary..................unallocated
Disk 0........MYVOL..................
Basic.........125.00GB NTFS.......107.88 GB
232.88GB....Healthy (System)....Unallocated
Online

and Disk2VHD has this:

Volumes to include:....Size...........Free........Space required
[x] C:\ MYVOL...........125.00GB....33.26GB...94.22GB

I checked the feature to [x] Prepare for use in Virtual PC when creating the VHD with Disk2VHD.

However, Windows 7 Virtual PC cannot attach to the VHD.

So I downloaded VirtualBox to see what would happen. VirtualBox just opens a black rectangle and the disk never boots; it shows the full size of the VHD as 232GB (that is, the 125GB system partition plus the 108GB unallocated).

Is it the size of the original disk that is preventing Virtual PC from attaching? I was hoping that shrinking the boot partition to 125GB would cause the VHD to fall within the 127GB limitation.

Thanks for the help.

Reply to my own question (my emphasis):

Note: Virtual PC supports a maximum virtual disk size of 127GB. If you create a VHD from a larger disk, even if you only include data from a smaller volume, it will not be accessible from a Virtual PC VM. In addition Virtual PC doesn't support the Multiprocessor Specification, which means that it won't be able to boot VHD's from multiprocessor Windows XP and Windows Server 2003 systems.

Is there any software out there that will "spoof" a disk of different size?

Why is this 127GB limit present? Is there a technological reason for it?