1 : Download and Install :
Zune
NetFx4
2 : Create vm_web folder on C: extract the contents of the setup Windows phone 7 tools (vm_web.exe) package with winrar to C:\vm_web\
3 : Go to the folder and open the file baseline.dat in notepad
4 : Look for the section named [gencomp7788]
5 : Change the value InstallOnLHS from 1 to 0
Change the value InstallOnWinXP from 1 to 0
Save and close baseline.dat
6 : CMD+R C:\vm_web\setup.exe /web
Wait wait wait...
Zune
NetFx4
2 : Create vm_web folder on C: extract the contents of the setup Windows phone 7 tools (vm_web.exe) package with winrar to C:\vm_web\
3 : Go to the folder and open the file baseline.dat in notepad
4 : Look for the section named [gencomp7788]
5 : Change the value InstallOnLHS from 1 to 0
Change the value InstallOnWinXP from 1 to 0
Save and close baseline.dat
6 : CMD+R C:\vm_web\setup.exe /web
Wait wait wait...