While many vmware bits and bobs are available free for the evaluation perios only, the server would appear to be free to download. Read the EULA, much is GPL - but not all.
I'll second btmiller that a VMM under windows should be vmware if you can manage it. There is a wide support base and many howtos.
Slackware, kubuntu, LIW, CoLinux and Topologilinux have been tried (under virtial pc?) ... suggest:
1. K/Ubuntu (under vmware may work better) - I take it from your selection that you prefer the kde desktop?
2. OpenSUSE (Latest versions have been optimised for virtualisation - though Novell were really thinking, "the other way around".) OpenSUSE may be a good option for you under the virtual PC ... you'll need the latest vpc and suse though.
You really need to figure what you want to do - learning linux is best under dual boot or a live distro (so you don't have to learn virtualisation as well) see http://www.zegeniestudios.net/ldc/
Personally, I'm looking at this the other way - running a Windows VM in Ubuntu/Xen. Xen can be installed to ubuntu via aptitude (i.e. easily) and I can configure a triple-boot (ubuntu-win-xen) so I can select the mode I need. I'm still reading... there's not much I need to do with windows, I'm learning virtualisation, but I figured it would look cool to show windows running inside a window on a linux desktop...