Are production servers running as virtual images a good idea

1. shut down the machine and export. To replicate the machine copy the export folder into your Hyper-V directory and import it. NB you can only import once, so import a copy!

2. yes.

JR

Re Michael's question: You can't export a machine without shutting it down first. You could snapshot it (e.g. www.drivesnapshot.de) and then restore the snapshot to a new machine with disks of the same size. However when you boot it the new VM will think the original network card(s) have been removed and replaced with new one(s). Not a big deal, but you'll be left with a ghost network card that's hard to remove, just as if you had fiddled with the network cards in a real PC.

I would shrug and shut down the PC to use an export. It takes only the time needed to make a copy of the hard disk file(s), which can be a while if they're big.

This sounds weird. 40 VMs for 40 sites?

IIS can host multiple web sites per machine. Can you not have, say, 3 servers, and use IIS host headers to host 15 sites a piece? Or does each web application instance have to be that dedicated?

Regardless you will need to do some kind of reverse proxy if you want to share a single IP across 40 boxes. You will need to set up each host name in the reverse proxy so it knows to which box to send that host header...