It depends which version of Virtual PC you install. See this wiki page with a table for overview on Guest OS versions.
(sorry, forgot link)
http://en.wikipedia.org/wiki/Windows_Virtual_PC
p.s. I have run SH1 in a virtual pc (vpc 2007 iirc) using freedos as OS:
http://www.freedos.org/ But I can't remember how I did it exactly. I think I used a pre-built virtual harddisk made by someone.