Which edition of XP are you running there? Home or Pro? According to the system requirements XP Home isn't on the list of supported versions while XP Tablet PC is.
- Supported Operating Systems: Windows Server 2003, Standard Edition (32-bit x86); Windows Server 2003, Standard x64 Edition; Windows Vista Business; Windows Vista Business 64-bit edition; Windows Vista Enterprise; Windows Vista Enterprise 64-bit edition; Windows Vista Ultimate; Windows Vista Ultimate 64-bit edition; Windows XP Professional Edition ; Windows XP Professional x64 Edition ; Windows XP Tablet PC Edition
An x64-based or an x86-based computer with a 400 MHz or faster (1 GHz recommended) processor with L2 cache
Processor: AMD Athlon/Duron, Intel Celeron, Intel Pentium II, Intel Pentium III, Intel Pentium 4, Intel Core Duo, and Intel Core2 Duo
RAM: Add the RAM requirement for the host operating system that you will be using to the requirement for the guest operating system that you will be using. If you will be using multiple guest operating systems simultaneously, total the requirements for all the guest operating systems that you need to run simultaneously.
Available disk space: To determine the hard disk space required, add the requirement for each guest operating system that will be installed.
Virtual PC 2007 runs on: Windows Vista™ Business; Windows Vista™ Enterprise; Windows Vista™ Ultimate; Windows Server 2003, Standard Edition; Windows Server 2003, Standard x64 Edition; Windows XP Professional; Windows XP Professional x64 Edition; or Windows XP Tablet PC Edition http://www.microsoft.com/downloads/d...n#Requirements
Another item of concern is the hardware factor of whether or not your cpu supports virtualization. If not that would explain immediate problems. And by the way welcome to the sevenforums!