Just use a native VHDX, prepare it on another machine, compress it fully using the NTFS compression (offline and using nsudo to compress everything) Update it offline using the most recent cumulative package and after that, very important, do a dism reset base (that prevent 2/4 GB wasted on first online update) Once you have your VHD ready just copy it on your 16GB hdd and add it to the bootloader (better if you avoid to waste another 500MB removing the system partition) This way 16 GB are more than enough even for an x64 installation (around 10 GB of used space), and is obviously even better for x86 (around 7GB). BTW the native VHD can be placed also on the SD and can be larger than 15/16GB