I am setting up this 2012 R2 VM while watching Keynote of SharePoint Conference 2014. Here is what I did.

I created a New VM on Windows 8.1 and choose Generation 2 vhd.

Attached the ISO. Gave key and installed the OS. First thing that happened is the dialog below when I logged in.

It asked me to select the resolution J Awesome.

All the prerequisites installed successfully.