I would go with a full retail version of Win 7 Pro.
I didn't realize the differences in the OEM version and bought it two years ago. I saved money but the limitations are annoying.
Of course that was before I found sevenforums to ask the question you have.
I also have a retail version of XP and set up dual boot for my XP games as you wish to do.
Virtual XP did not work well. Terrible graphics as already mentioned by others.