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The MS solution will work as well though. They've made the image proprietary and it's extremely difficult to get to run in VMware. The usual suggestion is simply to use the MS Virtual PC software for those images.
IE6 is not a small program, and it integrates itself with all sorts of things throughout Windows. However, in these days of super cheap HDDs it's not much of a concern on a virtual machine.
I run IE6 system and IE 3.0, 4.0, 5.01, 5.5, and 7.0 standalone.
To create a standalone IE 7.0 simply install it, reboot, copy the IE7 folder, paste a copy elsewhere, uninstall IE7, reboot, and I think you may have to replicate the iexplore.exe.local hack though I'm not certain as I did this a long time ago.
- John