I was working on a project that required me copying and pasting lots of text from a word document to Visual Studio. After sometime, i couldn't copy paste anything. When i hit Control C at Word, i wasn't getting any error, however i couldn't paste the text too. I tried copy paste from notepad to notepad too, but wasn't working still. I copied clipboard.exe from my XP virtual pc, to Vista machine to see the clipboard content (Unfortunately Vista doesn't have clipboard.exe). I ran the clipboard.exe, and clipboard application went into a infinite loop, and i had to kill it from task manager. I was googleing lot’s of clipboard issues with Vista, however most of the solutions didn’t solve my problem. I decided to backtrack. I rebooted the machine, and noted down every step to find out what causes clipboard lock. Every time i run a virtual pc, with a shared folder to host Vista machine, the clipboard gets locked. I guess virtual pc, locks the clipboard when you share a folder, and don't release it, until you stop the share.
I dont know if it is a bug or not, but i solved the problem by not sharing from Virtual PC :)