Anyone who has used Virtual PC / Virtual Server for a while will have got their head around the fact that you cannot access physical hardware directly from the virtual machine - with the exception of devices connected to a serial or parallel port.  Well, as a number of people have discovered there is an interesting exception for 'internal modems'.  These are modems that are usually on a PCI card in the physical computer - or on a PCMCIA card in a laptop.

The trick here as that internal modems almost always implement a hidden serial port - to which the modem is hardwired.  This is true even of WinModems.

As such - all you need to do is to figure out which COM port is used by the internal modem (poking around under Device Manager will usually get you the answer quickly) and map that to COM1 in the virtual machine.  You can then just use a 'generic modem' configuration in the virtual machine to get this to work.

Source: http://blogs.msdn.com/virtual_pc_guy 

---