If you are a current user of Virtual PC 2007 SP1, you will encounter compatibility issues on the Windows 7 Release Candidate. Not to worry, Microsoft has released a successor called Windows Virtual PC providing an enhanced level of compatibility for customers still running applications designed for Windows XP. Clubhouse member Auri Rahimzadeh recently did an in depth look at installing and using the technology here
"Windows Virtual PC provides the capability to run multiple Windows environments such as Windows XP Mode from your Windows 7 desktop. To download Windows Virtual PC and the Windows XP Mode environment, please follow the steps below. For information on how to set up Windows Virtual PC and Windows XP Mode, check out Running Windows Virtual PC with Windows XP Mode in the Documentation section."