This one has been killing me for a while now and of what I noticed, a large number of other people. The problem is that after you install the Loopback Adapter under Vista, the virtual network is identified as public. That also makes your PC invisible to other machines and vice versa. This isn’t good as I am sure we are all setting up the Loopback Adapter to interact with virtual networks. I searched the net but couldn’t find an answer but finally I figured out a workaround. I have set my virtual machine’s IP address as the default gateway on the loopback adapter connection settings (IPv4). Vista then prompts me to set a location for this network. I was more than happy to set it as Private and even name it virtual network and change the icon. If you run multiple VMs you can always set one machine as the gateway while connecting only that one to the loopback adapter and connect all virtual machines together in an internal (virtual) network.

[Update] It appears that Windows identifies networks via the DHCP server. Some virtualisation software (VMWare Workstation is one of those) allows you to setup a DHCP server on your virtual network. I have to admit I am no longer affected by this issue as I have moved away from the Loopback adapter and I am now using Bridged Networking or NAT (Hyper-V and Oracle VirtualBox).

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