(From http://ubuntu-tutorials.com/category/virtualization/)

With the release of VirtualBox 1.5.0 Innotek added the seamless integration feature. This is similar to what is available on Parallels on Mac, allowing you to run individual applications from a virtual environment seamlessly on your native desktop.

Once your guest machine is running and logged in you can activate seamless mode via a shortcut key. Now I want to note that you might double-check to see what your “Host Key” is set to before you dive into this. This proved problematic for me on my MacBook as the default key is right-ctrl, but there is no right-ctrl on the MacBook.

Navigate to (File > Preferences) inside the main VirtualBox window, select the “Input” option and verify or set your “Host Key” before you go forward.

You’ll also need to install Guest Additions on the Windows guest for this to be available.

Once you’re sure what your “Host Key” is, go back into your running Windows guest and activate seamless mode by hitting:

“Host Key” + L

This should make everything but the Start menu disappear, allowing you to launch individual applications as you normally would. You may want to move your bottom gnome panel to the top for better integration.

Configuring Shared Folder Integration

One additional thing you might want to setup is shared folder integration. What I mean by this is having the files from your Ubuntu desktop appear on your Windows desktop as well. This might be useful, for instance, if you launched Internet Exploder via your integrated Start menu and downloaded a file. The saved file would then appear on your native Ubuntu desktop, via the shared folder system.

First we’ll need to install the VirtualBox Guest Additions.

Next activate virtual shared folder support in your guest OS (Windows). Do this via the main VirtualBox window, selecting (Machine > Settings > “Shared Folders”). Click the button to add a shared folder (the top right icon), and define the path to your share. You’ll likely want to share your current Desktop, so you might select:

/home/username/Desktop

Now, toggling back to your Windows guest, you’ll want to mount this shared folder. You’ll need to open a shell using (Start > Run > “cmd“). Then use the following command to “mount” this shared folder between your Ubuntu host and your Windows guest.

net use x: \\vboxsvr\Desktop

You should now have access to your shared folder, but we also want to tell Windows to use this as its primary folder.

Start up regedit via Start > Run > “regedit“) and navigate to the following location:

HKCU\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders

Look for the key “Desktop” and change the value to:

x:

Save your changes, reboot your Windows guest and you should be done.