Well, I tried doing some googling and some searching on Microsoft's site for an answer but came up with nothing definitive about this.
If we really wanna find out, I have a spare machine here with OS X 10.3.8 on it as well as VirtualPC 7 with Windows XP and 2000. I think I even have a licensed Windows Me disk around here somewhere. If we can dig up a Windows virus that is known to propagate and damage files across network shares, I'd be willing to be a guinea pig on finding out if it's possible or not...
I still don't think a virus could propagate or do damage outside of the Shared Folder, simply because it does appear as a network share to the virtual OS, with all the restrictions of a network share. I don't think it's possible that a virus could even "look" outside of the Shared Folder, simply because VirtualPC is limited in that way -- you can't do an "ls" or a "dir" or change directories to anything outside of that Shared Folder -- it's like a dead-end road. It could circle and circle inside of the Shared Folder all it wants, but since the Shared Folder appears as the "root" directory to the virus and to VPC, there's no way to go "up" the hierarchy and "get out of" that Shared Folder. Sure, it could recursively go deeper, but that would only affect files and subfolders inside of the Shared Folder.