After shuffling back and forth trying to install the virtual network driver
from VPC 2007 on Windows 7 I have managed to totally break the Virtual XP mode.
I then uninstalled Virtual XP and completely removed all versions of Virtual PC to do a clean re-install but it would not help. The uninstall did not remove start-menu shortcuts and seems to have left some other files or settings.
Re-installing Virtual PC for Windows 7 looks OK.
Re-installing Virtual XP just drops the vhd-file in some folder but does not create a virtual machine or connect any of the shortcuts. There also seems to be problems with the Windows 7 - XP integration features.
Any suggestions on how to repair this situation?