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Depending on where you create the VRT, it will either become a relative path, or an absolute path. You can manually set this, by modifying the relativeToVRT="1"to a 0, and then write a complete path in the instead of just the image filename. See the example below of a full path VRT. <VRTRasterBand dataType="Byte" band="1"> ...
I assume the GeoTiff is in WGS84 EPSG:4326 with degrees as units. As you may know, degrees of latitude and degrees of longitude have different lengths if you are away from the equator. What you expect to see is a projected CRS, like Web Mercator EPSG:3857 or the UTM zone of your part of the world. In QGIS, you can set the project CRS to change the view ...
GDAL supports NetCDF: http://www.gdal.org/frmt_netcdf.html gdal_translate input.cdf output.tif
Adding a .tif extension to the file name solved the problem.
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