then why is the installation process so different for each?
Because XP Mode is designed to be simple to install and contains a pre-configured XP image to save you the trouble of installing the OS. But it's still just Virtual PC. Once you have installed it you should find a Virtual PC item in your Start Menu and you can use it to create other virtual machines.
Why would Microsoft go to the trouble of re-inventing the wheel when they already have a virtualization solution for workstations?