Re: XP in a virtual machine. It's not as easy as it sounds. I've been messing with Sun's Virtual Box off and on for a month or so and though it works well, some things are very hard to get working right. USB is a chore as is using the CD-RW or DVD-RW drive. Printer support is also a pain at times.
I've had no success at all getting my HP scanner to work in the XP VM.
Also, if Windows 7 dies for any reason, you lose XP as well. Dual boot will at least give you XP.