Suggest you read the EULA! Have a look at: Find End User License Terms for Microsoft Software Licensed by Microsoft or the Computer Manufacturer
From Windows Vista_Home Basic and Home Basic SP1, Supplemental_English_5d0d2c2e-c446-4720-bf62-ce1ed6b7e0af.pdf
MICROSOFT SOFTWARE SUPPLEMENTAL LICENSE TERMS
WINDOWS VISTA HOME BASIC, HOME PREMIUM, BUSINESS, ULTIMATE, AND THEIR SERVICE PACK 1 VERSIONS
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If you are licensed to use Microsoft Windows Vista Home Basic, Home Premium, Business, or Ultimate, or Service Pack 1 of any of these Windows Vista editions (the “software”), you have the following license right. If there is a conflict with any past or future license terms for the software, this supplemental license term applies.
Use with Virtualization Technologies. Instead of using the software directly on the licensed device, you may install and use the software within only one virtual (or otherwise emulated) hardware system on the licensed device. When used in a virtualized environment, content protected by digital rights management technology, BitLocker or any full volume disk drive encryption technology may not be as secure as protected content not in a virtualized environment. You should comply with all domestic and international laws that apply to such protected content.
I am no expert in this matter but Vistal EULA specifically limits it's use as a VM!