As time marches on, you will periodically switch from old computers to new ones. Typically when you do this, you switch operating systems. You will either go with a newer version of Windows or you may completely switch platforms and go with a Mac or Linux.
It’s most likely true that when you switch OSes and/or platforms, there’s going to be some old stuff that simply won’t work on your new computer. It’s either going to be certain programs, or hardware that required a very specific OS (usually Windows XP) just to use them.
The best reason to set up a virtual PC is for legacy apps and hardware (assuming the hardware is USB-based). When you do this it doesn’t matter what platform you switch to because you will still be able to get it working. Could be Windows 7, Mac or Linux – it doesn’t matter. Once your virtual computer is all set up, it’s install-and-run and/or plug-in-and-go for the most part.
Choosing the right virtual PC software
Windows
VMWare Player: http://www.vmware.com/products/player/
Virtualbox: http://www.virtualbox.org
Both of these are free.
My recommendation is to go with VMWare player because it’s much easier to deal with. Things like proper video and audio drivers are pretty much 100% automatic. In Virtualbox you will need to install "Guest Additions" for video driver stuff. The software comes bundled with this, but it’s not automatic.
This is how to install Virtualbox Additions once the OS is installed:

Mac
VMWare Fusion: http://www.vmware.com/products/fusion/overview.html
This is not free and will run you $80 – however it’s totally worth it to run your Windows stuff with absolute ease. The Windows OS essentially acts just like any other application you have on your OS X desktop and does so seamlessly. However it is recommended you have a fairly beefy amount of RAM (at least a bare minimum 4GB) so there’s no choppy operation when Windows is running virtually.
Linux
Virtualbox: http://www.virtualbox.org
Virtualbox runs the exact same way on Linux as it does Windows. In most distributions you can install Virtualbox easily via your distro’s app repository. Virtualbox has wide support on Linux and is known to be a rock-solid stable app for virtual computing.
There is VMWare Workstation for Linux, but it’s not free. You’re probably using Linux because it’s free, so having to pay for anything isn’t exactly what you were looking for. This isn’t a problem since Virtualbox is free and works very well in the Linux environment.
What you need
It’s assumed you want to run older Windows. For that, you need a disc with a valid license. That’s it. No, you cannot transfer an XP license from a sticker on another computer (such as a Dell laptop). It has to be a full retail license and not OEM.
There are going to be some of you that are going to run Windows illegally and I can’t stop you, so I’ll give you a few tips.
Before continuing, no, I am absolutely not telling you to run Windows illegally, nor will I tell you where to get it. In my virtual XP setup I do in fact have a retail license of Windows XP Professional Edition I paid $160 for (yes, I really did pay that much), but you most likely don’t. If that’s the case, here are a few things you need to know.
WGA
Windows Genuine Advantage is what will stop you in your tracks from getting virtual XP to work if attempting to run it illegally. This was introduced with Windows XP Service Pack 2. If you want XP without WGA, you must run XP SP1 or earlier.
To note, XP runs like absolute garbage without SP2 or SP3.
Disabling all Windows Updates
If you run XP SP1, the OS will continually bug you to update every time you boot it, so you’ll have to disable it.
Okay! You convinced me! I’ll buy a copy of XP! Where do I do it?
Here: http://www.nextag.com/windows-xp-license/compare-html
The cheapest is around $70. If you’re wondering whether it’s worth the cost, that’s up to you. Do you really need those old apps/hardware to work that only ran in XP? Will it save you money in the long term to keep that legacy stuff running? If the answer is yes, buy the license.
I can say with full honesty that my purchase of an XP license was one of the better computer-related purchases I made. It’s completely updated, I never have to worry about "the man" coming down on me, and it just makes everything more convenient.
And if you’re wondering whether you should buy Home or Pro, go with whatever is cheapest because it really doesn’t matter since all you’re doing is virtual PC use.
Setup of your virtual XP machine
There’s only two things you have to take into consideration to have a well-running virtual PC. The first is your physical RAM, the second is dedicating enough space.
Your physical RAM
Recommended on 32-bit system: 3GB
Recommended on 64-bit system: 4GB or greater
No matter which virtual PC software you use, the RAM assigned to your virtual PC uses your physical RAM to do the job.
To have a smooth-running virtual computer, you will need to assign it at least 1GB of RAM. 2GB is preferable. This means you need to have at least 3GB of physical RAM in your computer to be able to assign the virtual computer that much.
"Can I get away with assigning the virtual PC 256MB or 512MB?"
Yes, but your virtual XP will run noticeably slow. If what you intend to run doesn’t require a lot of memory, then you will be able to get away with 256 or 512. Going below that, such as to 128MB, isn’t advisable because XP will run molasses-like slow – even if you disable Themes and anything else you can think of.
Dedicating enough hard drive space
When you first to go set up your virtual PC, the software (VMWare or Virtualbox) will ask you how much hard drive space you want to assign it. My recommendation is to assign as least a full 10GB of space.
You may think, "there’s no way I’d ever fill that up in a virtual XP", don’t be so sure. Once you add in all the updates, Service Packs, all your apps and so on, space can get eaten up quickly.
Also bear in mind that once the size is set, it cannot be changed, so if you set it too small and run out of space on the virtual hard drive, you’ll have to create another one as a "D" drive or start all over again and reinstall the whole thing from scratch.
I’ve found in my personal experience that 10GB is a good number to go with, as I have personally filled up 8GB systems, but never 10GB. That extra 2GB does make a difference.
Other things to take into consideration
These are the other typical questions people have with computing virtually:
How do I easily transfer files between the host OS and the virtual OS?
The freebie virtual software like VMWare Player and Virtualbox do not have file sharing, but you can set up network-shared folders from within XP out to the host OS. This will allow you to connect to your virtual computer the exact same way you would to another networked PC on the LAN.
How does the virtual PC "know" when certain USB devices are plugged in?
The Virtual PC software will install drivers in the virtual OS so it will detect USB devices through your host computer. The way it typically works is that you boot the virtual PC first, then plug in the USB device, and the virtual computer should detect it without issue. You can test this with something simple, such as a USB stick.
Is a virtual PC "shielded" from malware/spyware/etc.?
No. There’s a common misconception that if an OS is in a virtual environment that it’s not susceptible to the normal dangers a normal PC would be. While it’s true you can simply shut down a virtual computer easily, that doesn’t mean it cannot launch malware/spyware every time it boots, should it be infected.
It is strongly suggested that once you have your virtual XP all set up to install Microsoft Security Essentials, which XP fully supports and runs very smoothly – even in virtual environments.
Can I run games on a virtual computer?
The general rule of thumb with gaming on a virtual PC is this:
If it requires full-screen to play, don’t do it.
Windowed games or games with the ability to run in a window will run fairly well on a virtual PC, provided the hardware requirements aren’t too heavy. If it requires full-screen mode just to work however, you’ll quickly discover it’s an annoying experience at best.
Can I install more than one XP using the same license?
You can, but there’s a strong chance it will invalidate your license once you go to update the second installation via Windows Update for the first time.
What you’re better off doing is that once your first XP is installed, save a "snapshot" of the OS. Virtualbox and VMWare both allow you to do this. Note that when you save a snapshot, it will take a really long time to complete, but it’s worth it because you have a completely backed up "fresh" copy just in case you need it – and you will be under no threat of invalidating your XP license when you do this. The only drawback is that you cannot run both copies at the same time.
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