Step 1.
Install Virtual PC
Step 2.
Create a new custom (I always creat custom machines) virtual PC, and make sure the Win2K installation CD rom is inserted when you boot it. Then just follow the normal Win2K installation.
Because of the emulated network drivers, you won't be able to get IP addresses via DHCP for that virual machine, unless you have some kind of DHCP server service running on the host. Just manualy assign a IP address to you network adapter (witch will be a DEC emulated networkcard) or use the bridged setup, where your emulated networkcard shares the IP address with your hosts networkcard.
The amount of ram will do, but don't expect rocket performance.
Hope this helpes