I believe that it will run programs in XP Mode in 32-bit, regardless of what version of W7 you have installed.
Thanks a lot,
i bought an OEM copy of windows 7 pro because i felt that xp mode didn't work well in my 64 version of windows 7 home. well, it does install better but i think Virtual PC is a bust. it gave me 512 RAM and never asked me what i wanted. and it assigned me some crazy video driver that didn't even have 3D. the result is that i am unable to play Legacy games at all. what a waste of 150 bucks for another copy of windows 7.
You can always use something like VirtualBox and install whichever version of XP you want to use. It tends to be a bit faster, and more configurable than VirtualPC. And, it's free and works with Premium.