You do not need hardware virtualization. Originally XP Mode required it, but now with Windows 7 service pack 1 it is not required. If you are not running SP1 (shame on you) then you can download a XP Mode update (step 4 on the XP Mode download page) which will allow it to run without hardware virtualization.
XP Mode runs using Virtual PC and the officially published Virtual PC requirements say:
- 1 GHz 32-bit / 64-bit processor required
- Memory (RAM)
- 2GB memory or higher recommended
- Recommended 15 GB hard disk space per virtual Windows environment
- Note: Windows XP Mode is only available in Windows 7 Enterprise, Windows 7 Professional, and Windows 7 Ultimate.
And on the FAQ page it says:
- Is hardware virtualization a must-have to run Windows XP Mode?
- No. Windows XP Mode can be run on a CPU without hardware virtualization.
- Is hardware virtualization better?
- For Windows XP Mode the performance will be more than acceptable with or without hardware virtualization. For developers using Virtual PC with Windows Vista or Windows 7 virtual machines we recommend HAV as the non-HAV is only tuned for XP Mode.
Regarding 32-bit and 64-bit support, both are able to be the host, but the virtual OS can only be 32-bit under Virtual PC/XP Mode. Also from the FAQ:
- Does Windows Virtual PC support 64-bit Windows XP as a guest operating system?
- No. Windows Virtual PC and Windows XP Mode was designed to help small business with application compatibility from Windows XP to Windows 7. The majority of business applications currently run on 32-bit versions of