Ok, I will only flag out the hard part, the rest is standard protocol.
For the file system, it may make sense to use a normal non-RAID partition because in the VM, there should not be any performance improvement (or rather its probably going to cause performance issue). So, what I did was a simple 1 x swap and 1 x ext3 partition. If you free you want to secure your /boot, you can split that out too.
The rest goes as per normal. After the reboot, you will realized you see nothing (or some garbage) on the screen and cannot see anything. To fix this, you have to get into grub menu. Edit the kernel... line adding "vga=0x32D" at the end. That should allow you to boot up into text mode at least.
Now once you are in text mode, you will want to fix this once and for all. Go to /boot/grub and change the menu.lst according with the vga=0x32D on the line.
You will also notice the screen is huge and its not very friendly for some of us using a laptop with tiny screen. To fix that, you will need internet to install some modules. Once you confirm that internet is up, do :
yum install system-config-display
and then after the installation, run :
You X should now run properly in whichever resolution your choose. The rest, should be easy.