The VHD file is divided into three types that can be created using Hyper-V Manager or by using the Windows Disk Management tool in Windows 7:
1. Fixed VHD. The fixed VHD file is assigned a virtual disk size that is the size of the virtual disk specified when the VHD was created. For example, if you create a virtual hard disk size of 2 GB, you will create a file size of approximately 2 GB, where part of the space is used for the internal VHD structure. The size of the fixed VHD does not change as the data is written to the virtual hard disk.
2. Scalable or dynamic VHD. At any given time, the size of the extensible or dynamic VHD file is the same size as the actual data that was written to the file. The file also increases dynamically as more data is written. For example, files that support a 2 GB virtual hard disk are initially about 2 MB in size on the host file system. As the data is being written to this virtual hard disk, the file grows until it reaches a capacity limit of 2 GB.
3. diff VHD. A differential VHD is similar to a dynamic VHD, but contains only the modified virtual disk blocks of the associated parent virtual disk. The differential VHD is linked to a specific parent VHD, called a child VHD. The parent VHD file is read-only, and all modifications are made against the child VHD. The VHD file type of the parent VHD can be any of these three VHD types, including another differential VHD. Multiple child VHD files can form a chain of differences.