Windows 7 has a nifty new feature called XP mode that uses Windows Virtual PC in the background. My first surprise is that I had to download the software for this from MS which was about 500GB. However, that was the least of my worries.
It turns out that Windows Virtual PC will only run with hardware assisted virtualization. On AMD processor systems this isn't an issue because almost all AMD processors have hardware assisted virtualization. Intel, on the other hand, has been using hardware assisted virtualization as a differentiator between upper and lower end chips for the last several years. Basically trying to get a premium out of it. Many computers with Intel processors do not have hardware assisted virtualization. Unfortunately, my laptop is one of these.
Fortunately, even though it is unsupported (like I'd be calling for support) Virtual PC does run on Windows 7. A blog documenting it is here: http://blogs.msdn.com/virtual_pc_guy/archive/2009/08/19/running-virtual-pc-2007-on-windows-7.aspx.
You can also get Virtual Server 2005 to install on Windows 7 if you really want to, but it is a pretty nasty process. Details are here: http://tfl09.blogspot.com/2009/08/windows-7-and-virtual-server.html.
UPDATE: Microsoft has released an update for XP Mode and Windows Virtual PC so that hardware visualization is not required. See http://support.microsoft.com/kb/977206
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