The Virtual Microscope is being designed as an integrated computer hardware and software system that generates a highly realistic digital simulation of analog, mechanical light microscopy. We present our work over the past year in meeting the challenges in building such a system. The enhancements we made are discussed, as well as the planned future improvements. Performance results are provided that show that the system scales well, so that many clients can be adequately serviced by an appropriately configured data server. (Also cross-referenced as UMIACS-TR-98-23)