I've used both VirtualPC and VMWare before. VirtualPC was easily the best if the client OSs were Windows and VMWare was better for Linux clients. The problem with both of them was that they seemed to use quite a lot of resources on the host even when they weren't doing anything. That was a few years ago, perhaps things have got better.
I've seen the XP compatibility mode for Windows 7. It's pretty amazing. The apps look like W7 apps, and run in a window, but they're actually running under an XP VM. They show in the start menu like other apps too. Graphics performance is not that great. I'm looking forward to seeing if VirtualBox's Direct3D passthrough layer actually works.
Jim