A friend turned me on to Virtual Box. It's an easy to use virtual machine application that allows you to run all sorts of guest operating systems on all sorts of host operating systems. I use it to run Ubuntu Linux within Windows XP. You could use it to run WinXP on OS X, if you wanted.
I had been using VMWare. I think virtual box is much faster, and it offers a lot more configuration options. And it's a smaller install.
It's free, so give it a try.