Sorry for the delay,....
YES YOU CAN...you can install virtualpc 2009 / XP/VISTA mode where you have VISTA/XP in a virtual PC, and you applications installed in those environments are still working/ avalable in the start menu! attached to your win7 os..
Your C will need to be running windows 7 64-bit.... and the motherboard also need to have HARDWARE ASSISTED VIRTULIZATION enabled....
then you can install the free XP that comes with WIN7 Virtual PC.. fully activated....
IF,
You dont have hardware assisted virtulization... then you will still need to be running the 64-bit windows seven as when installing software that is compatible with XP on WIN7 It works best in 64bit not very well in 32bit mode.... just RIGHT CLICK the install file and GO PROPERTYS... then select COMPATIBLITY ... XP PRO SP2 Change for all users... and RunsAS ADMINISTRATOR....
When installing the system will accept the install and run in "xp compatiblity mode" but after installed just CHECK the shortcut (in start menu) make sure that it is runing in xp compatiblity and As administrator and for all users... "the computer uses its own account(SYSTEM) to run certain Background objectS"