how to install OS on VM that i have created using Hyper-V

Hi,

I have created a Virtual machine and in server settings I've kept CD as 1st boot device.
Still the when Start the VM it say's test-server could not intialize.(Virtual machine ID 9B1803BB-5C1E-42DD-9809-A17663A04C8D).
test-server is the name of my virtual machine.
While creating the virtual machine i have set option to intall OS has later.

Is there any way i can install the OS from CD now and not with Image file.
Please tell me what are the Bios settings should be, to install OS on a VM to start intsall OS as i press the connect and select start on action pane.

Thanks in advance,
Jayanth