I have a VM set up through Windows Virtual PC for Windows XP Pro and I have been completely unable to get ClearType to work.
I have turned it on in the Display -> Appearance -> Effects dialog but it seems like it completely ignores this. All text is still without any anti-aliasing. Even setting it to normal smoothing doesn't work. If I disable Integration Features, it seems to work, but then I lose a lot of nice features.
What's weirder, is that the Windows XP Mode installed with Windows Virtual PC (this is separate from my XP Pro VM) works with both ClearType and Integration Features just fine. I turned it on the same way and it works like a charm, no problems.
I'm running Windows 7 Professional 64-bit as the host OS and have the latest (to my knowledge) Windows Virtual PC installed. The only funny business I can think of is that I've enabled 24-bit color via the Group Policy setting inside each XP virtual machine (both Pro and the stripped down XP mode copy). This is a fairly well-known trick documented all over the web, but here's a typical post about it.