I found an excellent post discussing how to make Virtual Server 2005 work on Vista, but the key thing that helped me was changing the authentication on the VirtualServer virtual directory to Basic Authentication (it was originally Anonymous Authentication). This prevented me from having to run IE as an administrator.
Update 16 Oct: after moving my VMs back to my machine, I discovered that the basic auth enabled me to start the machines and use the virtual machine web site, but when I tried the ActiveX control to actually control the machines, it would not accept my user account when prompting for the remote control. Virtual Server 2005 R2 SP1 beta 2 did not help. I ended up going back to Windows integrated security for the VirtualServer virtual directory and doing a "Run as Administrator" on IE before browsing to the administration website.
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