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Your link to that Microspft web page shows that you downloaded a Service Pack.
A Service Pack is nothing more than a grouping of patches and is NOT an Operating System.
You need the entire original Microsoft OS, not merely a Service Pack.
Go buy a copy of Microsoft Windows Server 2003 and start all over again.
Thanks for help!
I was able to get ISO image and installed 2008 server on VM. Now I want to copy some software from my Windows 7 machine to VM. Could you please advice how do I access another machine? I tried to ping Windows 7 from VM but not getting reply.