See the "Project Server Virtual Migration Environment" documentation for full details and setup instructions.
PLEASE NOTE - we about issues in Custom Field and User Editing scenarios in the migrated 2007 Project Web Access Site. The following steps will solve the issue:
Dynamic content compression must be disabled in Internet Information Services (IIS) Manager in the Project Server VME (it is on by default in Windows Server 2008 R2). Having dynamic content compression enabled can cause issues if you need to make corrective changes to your Project Server 2007 data in the VME (specifically issues with editing custom fields and resources).
To disable Dynamic Content Compression:
1. On the Project Server VME, click Start, click Administrative Tools, and then click Internet Information Services (IIS) Manager.
2. In Internet Information Services (IIS) Manager, in the Connection Pane select VME (VME\Administrator).
3. In the VME Home pane, in the IIS section, click Compression.
4. In the Compression section, deselect Enable dynamic content compression to disable it.
5. In the Actions pane, click Apply to save the change. The Alert “The changes have been successfully saved” displays if the change has been applied successfully.
6. Close Internet Information Services (IIS) Manager.