Installing XP mode under Windows 7:

Follow the instructions on  http://www.microsoft.com/windows/virtual-pc/download.aspx

Note that the default networking configuration of the XP mode virtual machine is NAT. In case of difficulties with NAT traversal (resulting in no audio), change the network configuration of the XP mode's network interface to bridge mode:

  • start XP mode
  • select Tools - Settings from the Windows Virtual PC toolbar.
  • select Networking
  • The current setting for Interface 1 is NAT. Changing to Bridge mode: simply select the name of the adapter of the host machine you want to use for placeing calls.

Now the virtual XP machine is on the same network as the host with the specified adapter.

More information on networking with XP mode is available at:  http://blogs.technet.com/b/windows_vpc/archive/2009/09/26/networking-and-using-windows-xp-mode.aspx