Just to clarify this:
Virtual PC has currently two versions available, the one called Windows Virtual PC
is the current, latest version, but also the previous version Microsoft Virtual PC 2007
is still available.
Virtual PC 2007 can be run on XP and all editions of Vista and Seven except Starter, whereas the current version Windows Virtual PC runs only on Seven (all editions except Starter).
Windows XP Mode is a free, fully working virtual machine with XP professional Service Pack 3. It needs the current version of Windows Virtual PC and only runs on Seven Professional, Ultimate or Enterprise. Windows XP Mode does not work on Virtual PC 2007.