One of the major updates done on Windows Azure is the capability to build and deploy Virtual Machines on it, which gives Microsoft Cloud Computing solutions the true meaning of offering the Infrastructure as a Service. As you certainly know that the Cloud Computing is composed of main 3 layers, the Infrastructure as a Service, the Platform as a Service and the Software as a Service. Yes Windows Azure is Microsoft Solution for the Cloud Computing Platform but it also offers you the solution of Virtual Machine to get the ability to deploy your applications on the desired Operating system, this is the true meaning of the Infrastructure as a Service.
Once we started talking about the Infrastructure as a Service or Windows Azure Virtual machine, then the target segment is totally different, from developers to IT Pros.
Here are some blog post that I hope they will help you understand more about the Virtual Machine on Windows Azure. The Disks and Images, Virtual Machines Networks (coming soon) and Virtual Machine Scalability and Availability.
Why Windows Azure Virtual machine and what are its advantages on the VMRole?
There are a lot of differences between both of them regarding the Storage for example, the Virtual Machine is based on persistent Storage. If the application goes down for any reason, the data will be available unlike the VMRole. In the Virtual Machines you will have the capability to add new VHD easily through the Cloud directly unlike the VM Role which will require to do these things offsite then deploy it to Windows Azure.
So IaaS or PaaS, I mean what you will choose if the Windows Azure Virtual Machine will give you all these things. You can find all these related issues in the following blog post.
Here is an example of how you can create a Virtual machine using an image already existing on the portal.