diff --git a/lib/hobo.rb b/lib/hobo.rb
index 7a34b4ca3..23913541f 100644
--- a/lib/hobo.rb
+++ b/lib/hobo.rb
@@ -8,7 +8,7 @@ require 'logger'
 require 'virtualbox'
 require 'net/ssh'
 require 'ping'
-require 'hobo/error'
+require 'hobo/util'
 require 'hobo/config'
 require 'hobo/env'
 require 'hobo/ssh'
diff --git a/lib/hobo/config.rb b/lib/hobo/config.rb
index db94a290f..35ad9d24c 100644
--- a/lib/hobo/config.rb
+++ b/lib/hobo/config.rb
@@ -7,7 +7,7 @@ module Hobo
     @config = nil
     @config_runners = []
 
-    class <<self
+    class << self
       def config
         @config ||= Config::Top.new
       end
@@ -48,6 +48,7 @@ module Hobo
       attr_accessor :base_mac
       attr_accessor :project_directory
       attr_reader :forwarded_ports
+      attr_accessor :hd_location
 
       def initialize
         @forwarded_ports = {}
@@ -60,6 +61,11 @@ module Hobo
           :protocol   => protocol
         }
       end
+        
+      def hd_location=(val)
+        raise Exception.new "disk_storage must be set to a directory" unless File.directory?(val)
+        @hd_location=val
+      end
     end
 
     class Top < Base
diff --git a/lib/hobo/env.rb b/lib/hobo/env.rb
index f0b553fe2..a50ceb4b0 100644
--- a/lib/hobo/env.rb
+++ b/lib/hobo/env.rb
@@ -8,7 +8,7 @@ module Hobo
     @@persisted_vm = nil
     @@root_path = nil
     
-    extend Hobo::Error
+    extend Hobo::Util
 
     class << self
       def persisted_vm; @@persisted_vm; end
diff --git a/lib/hobo/error.rb b/lib/hobo/util.rb
similarity index 61%
rename from lib/hobo/error.rb
rename to lib/hobo/util.rb
index d9f5145c7..36c18a22d 100644
--- a/lib/hobo/error.rb
+++ b/lib/hobo/util.rb
@@ -1,14 +1,19 @@
 module Hobo
-  module Error
-      def error_and_exit(error)
-        puts <<-error
+  module Util
+    def error_and_exit(error)
+      puts <<-error
 =====================================================================
 Hobo experienced an error!
 
 #{error.chomp}
 =====================================================================
 error
-        exit
-      end
+      exit
+    end
+
+    def logger
+      HOBO_LOGGER
+    end
   end
-end
+end  
+
diff --git a/lib/hobo/vm.rb b/lib/hobo/vm.rb
index 40129eb0a..119a96632 100644
--- a/lib/hobo/vm.rb
+++ b/lib/hobo/vm.rb
@@ -1,8 +1,10 @@
 module Hobo
   class VM
+    HD_EXT_DEFAULT = 'VMDK'
     attr_reader :vm
 
-    extend Hobo::Error
+    extend Hobo::Util
+    include Hobo::Util
 
     class << self
       # Bring up the virtual machine. Imports the base image and
@@ -28,9 +30,10 @@ module Hobo
       def suspend
         Env.require_persisted_vm
         error_and_exit(<<-error) if Env.persisted_vm.saved?
-The hobo virtual environment you are trying to resume is already in a
+The hobo virtual environment you are trying to suspend is already in a
 suspended state.
 error
+        logger.info "Saving VM state..."
         Env.persisted_vm.save_state(true)
       end
 
@@ -59,6 +62,7 @@ error
 
     def create
       import
+      move_hd if Hobo.config[:vm][:hd_location]
       persist
       setup_mac_address
       forward_ports
@@ -69,26 +73,46 @@ error
 
     def destroy
       if @vm.running?
-        HOBO_LOGGER.info "VM is running. Forcing immediate shutdown..."
+        logger.info "VM is running. Forcing immediate shutdown..."
         @vm.stop(true)
       end
 
-      HOBO_LOGGER.info "Destroying VM and associated drives..."
+      logger.info "Destroying VM and associated drives..."
       @vm.destroy(:destroy_image => true)
     end
 
+    def move_hd
+      error_and_exit(<<-error) unless @vm.powered_off?
+The virtual machine must be powered off to move its disk.
+error
+
+      old_image = hd.image.dup
+      new_image_file = Hobo.config[:vm][:hd_location] + old_image.filename
+
+      logger.info "Cloning current VM Disk to new location (#{ new_image_file })..."
+      # TODO image extension default?
+      new_image = hd.image.clone(new_image_file , HD_EXT_DEFAULT, true)
+      hd.image = new_image
+      
+      logger.info "Attaching new disk to VM ..."
+      @vm.save
+
+      logger.info "Destroying old VM Disk (#{ old_image.filename })..."
+      old_image.destroy(true)
+    end
+
     def import
-      HOBO_LOGGER.info "Importing base VM (#{Hobo.config[:vm][:base]})..."
+      logger.info "Importing base VM (#{Hobo.config[:vm][:base]})..."
       @vm = VirtualBox::VM.import(File.expand_path(Hobo.config[:vm][:base]))
     end
 
     def persist
-      HOBO_LOGGER.info "Persisting the VM UUID (#{@vm.uuid})..."
+      logger.info "Persisting the VM UUID (#{@vm.uuid})..."
       Env.persist_vm(@vm)
     end
 
     def setup_mac_address
-      HOBO_LOGGER.info "Matching MAC addresses..."
+      logger.info "Matching MAC addresses..."
       @vm.nics.first.macaddress = Hobo.config[:vm][:base_mac]
       @vm.save(true)
     end
@@ -109,7 +133,7 @@ error
     end
 
     def setup_shared_folder
-      HOBO_LOGGER.info "Creating shared folders..."
+      logger.info "Creating shared folders..."
       folder = VirtualBox::SharedFolder.new
       folder.name = "hobo-root-path"
       folder.hostpath = Env.root_path
@@ -126,28 +150,31 @@ error
     end
 
     def start
-      HOBO_LOGGER.info "Booting VM..."
+      logger.info "Booting VM..."
       @vm.start(:headless, true)
 
       # Now we have to wait for the boot to be successful
-      HOBO_LOGGER.info "Waiting for VM to boot..."
-
+      logger.info "Waiting for VM to boot..."
+      
       Hobo.config[:ssh][:max_tries].to_i.times do |i|
         sleep 5 unless ENV['HOBO_ENV'] == 'test'
-        HOBO_LOGGER.info "Trying to connect (attempt ##{i+1} of #{Hobo.config[:ssh][:max_tries]})..."
+        logger.info "Trying to connect (attempt ##{i+1} of #{Hobo.config[:ssh][:max_tries]})..."
 
         if Hobo::SSH.up?
-          HOBO_LOGGER.info "VM booted and ready for use!"
+          logger.info "VM booted and ready for use!"
           return true
         end
       end
 
-      HOBO_LOGGER.info "Failed to connect to VM! Failed to boot?"
+      logger.info "Failed to connect to VM! Failed to boot?"
       false
     end
 
     def saved?; @vm.saved? end
 
     def save_state(errs); @vm.save_state(errs) end
+
+    # TODO need a better way to which controller is the hd
+    def hd; @vm.storage_controllers.first.devices.first end
   end
 end
diff --git a/script/hobo-ssh-expect.sh b/script/hobo-ssh-expect.sh
index 82b1dd268..f27aeebeb 100755
--- a/script/hobo-ssh-expect.sh
+++ b/script/hobo-ssh-expect.sh
@@ -11,10 +11,9 @@ if { $port != "" } {
   set port_option ""
 }
 
-spawn ssh $port_option $uname@$host
+spawn ssh $port_option -o UserKnownHostsFile=/dev/null -o StrictHostKeyChecking=no $uname@$host
 
 expect "*password: " {
-  sleep 1
   send "$password\r"
 } timeout {
   send_user "Error connecting"
diff --git a/test/hobo/vm_test.rb b/test/hobo/vm_test.rb
index 84e25a298..ff11e1a5e 100644
--- a/test/hobo/vm_test.rb
+++ b/test/hobo/vm_test.rb
@@ -235,5 +235,41 @@ class VMTest < Test::Unit::TestCase
         Hobo::Env.persisted_vm.expects(:start).once.returns(true)
       end
     end
+    
+    context "creating a new vm with a specified disk storage location" do
+
+      should "error and exit of the vm is not powered off" do
+        # Exit does not prevent method from proceeding in test, so we must set expectations
+        vm = move_hd_expectations
+        @mock_vm.expects(:powered_off?).returns(false)
+        vm.expects(:error_and_exit)
+        vm.move_hd
+      end
+      
+      should "create assign a new disk image, and delete the old one" do
+        vm = move_hd_expectations
+        @mock_vm.expects(:powered_off?).returns(true)
+        vm.move_hd
+      end
+
+      def move_hd_expectations
+        image, hd = mock('image'), mock('hd')
+
+        Hobo.config[:vm].expects(:hd_location).at_least_once.returns('/locations/')
+        image.expects(:clone).with(Hobo.config[:vm][:hd_location] + 'foo', Hobo::VM::HD_EXT_DEFAULT, true).returns(image)
+        image.expects(:filename).twice.returns('foo')
+
+        hd.expects(:image).twice.returns(image)
+        hd.expects(:image=).with(image)
+        
+        image.expects(:destroy)
+
+        @mock_vm.expects(:save)
+        
+        vm = Hobo::VM.new(@mock_vm)
+        vm.expects(:hd).times(3).returns(hd)
+        vm
+      end
+    end
   end
 end