I've been thinking about doing this for awhile now. I'd use disk2vhd or VMware's p2v standalone tool. My thought is that these can be mounted and spun up if needed or just mounted for restoration as needed. I just tried VMware workstation and was pretty impressed. I know virtual box is free, but I liked the interface for VMware Workstation better.
Anyways, anyone else out there doing this to archive their terminated users before recycling (format hdd and reload windows) the user's pc?