I've never done it but my guess is that it's worth a try.
As long as the raw data is written properly it should boot, I mean you can write this stuff from a system that lives solely in RAM so my guess is that a VM will also work so long as it correctly emulates the writing to disk.
As for actual partitioning though I'd use a live CD for that part. I'm not entirely sure of the consequences of emulating that, it may or may not work as you expect so I'm not sure on that one.
As long as the raw data is written properly it should boot, I mean you can write this stuff from a system that lives solely in RAM so my guess is that a VM will also work so long as it correctly emulates the writing to disk.
As for actual partitioning though I'd use a live CD for that part. I'm not entirely sure of the consequences of emulating that, it may or may not work as you expect so I'm not sure on that one.