The primary reason that I installed Windows 7 RC on my desktop was to try out what is called XP Mode. I read some articles about XP Mode and it looked like it is just a virtual machine created with Virtual PC; however, some things sounded a lot better that my understanding about Virtual PC.
I immediately see about 3 problems running a Windows XP virtual machine on top of Windows 7. First of all, system requirement for running a vm. Some systems may have enough power to run, some may not, considering vms need their own security suites/antivirus/antispyware software. Second, XP license for virtual machine activation. Third, file/desktop sharing between host and guest system because this may be very confusing for non-technical users when there are 2 different desktops.