The system requirements for Virtual PC 2007 (a virtualization software similar to VMWare Workstation) says that the host computer must be running Windows XP Pro or the tablet edition.

You can however install Virtual PC 2007 on XP Home machine without problems though the installer will throw a warning saying “Host OS Not Supported” - ignore the error. It’s only the Microsoft will not provide support but the software will work just fine.

Even Virtual PC 2004 can be used on Windows XP Home without problems.

To download readymade virtual machines for VPC, you can visit the Microsoft Download Center and download vhd files for Windows Vista and Microsoft Office 2007 - require no activation though they expire after some time.