There are several ways you can do to create the Windows Azure Virtual Machine. Certainly there is the easy way where you can create it from the Windows Azure portal, there are also several others way that might be helpful for you in some cases during the development. First one is the PowerShell where you can create and take control over the Virtual Machines created on Windows Azure (IaaS) with some PowerShell Commands, you can find all the technicalities and the how to in the following link.

There are also another way where you can take control over the Windows Azure Virtual Machines is through the .Net Application where you can create new Virtual Machines using some C# or VB code. Here is the operation that can be done in your .Net application to achieve this.

Here is an example I found online that can help more the explanation and how the things can be done.

Here are some operations that you can do on the Windows Azure Virtual Machine Images, others that can be done on the Virtual Machine Disks.

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