New-TestVM.ps1

workflow New-TestVM
{
    param(
        [parameter(Mandatory)] 
        [String] 
        $AzureSubscriptionName,
        
        [parameter(Mandatory)] 
        [String] 
        $ServiceName, 
         
        [parameter(Mandatory)] 
        [String] 
        $VMName,   
                         
        [parameter()] 
        [String] 
        $InstanceSize = "Medium" 
        
    )
    $verbosepreference = 'continue'
    
    #Get the Credentials to authenticate agains Azure
    Write-Verbose -Message "Getting the Credentials"
    $Cred = Get-AutomationPSCredential -Name "AuthAzure"
    $LocalCred = Get-AutomationPSCredential -Name "LocalDexterPOSH" 
    $DomainCred = Get-AutomationPSCredential -Name "DomainDexterPOSH"
    

    
    #Add the Account to the Workflow
    Write-Verbose -Message "Adding the AuthAzure Account to Authenticate" 
    Add-AzureAccount -Credential $Cred
    
    #select the Subscription
    Write-Verbose -Message "Selecting the $AzureSubscriptionName Subscription"
    Select-AzureSubscription -SubscriptionName $AzureSubscriptionName
    
    #Set the Storage for the Subscrption
    Write-Verbose -Message "Setting the Storage Account for the Subscription" 
    Set-AzureSubscription -SubscriptionName $AzureSubscriptionName -CurrentStorageAccountName "dexterposhstorage"
           
    #Select the most recent Server 2012 R2 Image
    Write-Verbose -Message  "Getting the Image details"
    $imagename = Get-AzureVMImage |
                     where-object -filterscript { $_.ImageFamily -eq “Windows Server Technical Preview” } |
                     Sort-Object -Descending -Property PublishedDate | 
                     Select-Object -First 1 | 
                     select -ExpandProperty ImageName
    
    #use the above Image selected to build a new VM and wait for it to Boot
    $Username = $LocalCred.UserName
    $Password = $LocalCred.GetNetworkCredential().Password
    New-AzureQuickVM -Windows -ServiceName $ServiceName -Name $VMName -ImageName $imagename -Password $Password -AdminUsername $Username -SubnetNames "Rest_LAB" -InstanceSize $InstanceSize  -WaitForBoot
    Write-Verbose -Message "The VM is created and booted up now..Doing a checkpoint"
    
    #CheckPoint the workflow
    CheckPoint-WorkFlow
    Write-Verbose -Message "Reached CheckPoint"

    

    #Call the Function Connect-VM to import the Certificate and give back the WinRM uri
    $WinRMURi = Get-AzureWinRMUri -ServiceName $ServiceName -Name $VMName | Select-Object -ExpandProperty AbsoluteUri
    
    InlineScript 
    { 
        do
        {
            #open a PSSession to the VM
            $Session = New-PSSession -ConnectionUri $Using:WinRMURi -Credential $Using:LocalCred -Name $using:VMName -SessionOption (New-PSSessionOption -SkipCACheck ) -ErrorAction SilentlyContinue 
            Write-Verbose -Message "Trying to open a PSSession to the VM $Using:VMName "
        } While (! $Session)
       
        #Once the Session is opened, first step is to join the new VM to the domain
        if ($Session)
        {
            Write-Verbose -Message "Found a Session opened to VM $using:VMname. Now will try to add it to the domain"
                                    
            Invoke-command -Session $Session -ArgumentList $Using:DomainCred -ScriptBlock { 
                param($cred) 
                Add-Computer -DomainName "dex.com" -DomainCredential $cred
                Restart-Computer -Force
            } 
        }        
    }
} #Workflow end

Cool solution. Want to add it to the Azure Automation part of ScriptCenter (http://gallery.technet.microsoft.com/scriptcenter/site/search?f%5B0%5D.Type=RootCategory&f%5B0%5D.Value=WindowsAzure&f%5B0%5D.Text=Windows%20Azure&f%5B1%5D.Type=SubCategory&f%5B1%5D.Value=WindowsAzure_automation&f%5B1%5D.Text=Automation) so it shows up in the new Azure Automation runbook gallery?

Also, some feedback:
AzureConnectionName is kind of confusing here. It is really the name of your Azure subscription, and has nothing to do with an Azure connection asset.

Also, your comment says you use Connect-AzureVM (http://gallery.technet.microsoft.com/scriptcenter/Connect-to-an-Azure-85f0782c) to set up the connection to the VM, but it looks like you are just getting the WinRM URI. Does this work, given you aren't setting up the cert needed to talk between the VM and the Azure Automation sandbox (like Connect-AzureVM does)?

Hey Joe,

Thanks for the comment. I will definitely post this to the technet gallery.

I started out with using Connect-AzureVM and using one of the scripts from the gallery. So am still using the AzureConnectionName , I will change it to AzureSubscriptionName as that makes more sense.

While exploring I found that opening a PSSession by ignoring the certificate errors works. So the Connect-AzureVM is not needed anymore.
This has worked for me.