Re: Rule number 0
""Blue Pill" proceeds to wrap Windows installation into a VM and installs Linux underneath..."
That would be nice. But there are technical limitations that makes this quite hard to make as seamless as you would like it. And with "quite hard", I mean hard enough that no-one has tried yet. (I tried to run an actual installed-to-the-metal Windows in a VM, but it was difficult. Windows fights this I think.)
Then there are the legal challenges when MS goes after you for running Windows on an unauthorised platform -probably not enforcable, but do you have the millions to fight off MS?
As a underground hobby project it would be quite nice though. But getting rid of Windows altogether would be much nicer, and solve many more problems.