Win 7 crashes to BSOD when starting XP Mode

Zip up a few of the latest crash dump from \Windows\minidump and upload here, or run BlueScreenViewm and paste it's output here.

Never mind, I found them buried in all the other files in one of the folders, sorry.

Has XP mode ever worked on this PC, or is this the first time you've tried using it on this one? Is this PC the one in your specs?

All 3 dumps are identical:

ntoskrnl.exe
hal.dll
kdcom.dll
mcupdate_GenuineIntel.dll
PSHED.dll
CLFS.SYS

Are all drivers up to date, including chipset?
Try testing your ram:
Download Memtest86+ (you want the 2nd one Download - Pre-Compiled Bootable ISO (.zip)). Unzip it then create a CD from the iso file using your CD burning software. There is a good freeware burner called ImgBurn which will do this easily.

DO NOT burn the .iso file directly to CD. It must be used as input to a program that knows what to do with it, like the one I mentioned above.

Boot the CD and run for at least 3 complete passes unless it shows errors sooner than that.

Edit: You could also try removing ram and see what happens. If you have two 4GB modules, remove one. If you have four 2GB modules, remove two (in pairs).

Rich is working on the minidump - he'll be able to help you figure out the crash.

Usually there's an option in the BIOS about supporting virtual machines. Have you checked to see if that option is enabled?