Vista - Windows Server 2008 hosted on Virtual Server 2005 R2 very slow

Title of the post says it all.

Background:

I created an image of Windows Server 2008 Standard using Virtual PC 2007 SP1
on my laptop. All I've got is a bare-bones installation. I then sysprepped
it for use in our dev environment. I've put up a copy of it on our Virtual
Server 2005 host and it is running very slow. Opening up Task Manager in
the Virtual Host shows that the CPU is not working very hard, but the Task
Manager in the hosted Windows Server 2008 instance is almost always pegged at
100%. The weird thing is that it shows things like Task Manager taking up
huge chunks of CPU time. The VM additions have been installed and they
don't seem to make any difference.

Has anyone seen this type of behavior before? Any ideas?

Thanks.