After a couple days messing around trying to get vlite to work I've finally got my actually paid for an official copy of windows 7 down to a 5GB install, excluding pagefile and hibernation, though I disable hibernation, it takes about 25 seconds to boot from scratch anyway, see entirely no need for hibernation.
Its a shame a default install is around double the size and vlite was designed for Vista and theres so many steps needed to get rid of stuff from a Windows 7 install. Even with 5gb's theres a 2.5gb winsxs folder full of useless drivers, its a minefield getting rid of them, though a lot are possible. When you ditch certain things you start losing functionality and it won't install if you remove the wrong ones. Well done to the guys slowly working through what you can and can't remove.
Keep in mind I did a default install on a virtual server to check and it was around 10gb and that winsxs file was around 5 gigs and some 50k+files and tonnes of folders, its now down to 25k files and 7k folders and half the size. Whoever worked out the easy stuff to remove took a long time
Theres far more extreme lists of things you can remove, my actuall install folder is around 1.5gb, but I've heard people having an install folder that will fit on a cd.
Its insane the amount of useless pap they make you install, massive compatibility for old hardware 1 in 20million people will use on a newer windows 7 based PC just isn't worth it.
I bet you could happily have a 2GB install folder with full functionality, or they could give out a decent tool for making your own install disc with what you actually NEED on it for those that want to. the vlite website has links to forums with guides on how to do it if you want to. My windows 7 install from fresh certainly seems slicker than usual.
Its just a shame MS don't fully support letting you install what you want at a size you want.
ALso very happy I got my 2 64gb crucials when they were £95.
EDIT:- I'm sitting here using a Vista computer while installing windows on my other comp. This is clearly an older install but damn, my windows folder alone is now 21.6gb with 91.5k files in it, the "new" Windows 7 one is 5gb and 30k files, the majority of which are in that damn winsxs folder. Windows 7 default was a huge improvement over Vista, but theres still miles left they can cut out.