Is there any way to change the amount of memory allocated to the video card while in XP mode in windows 7?
i think this will help you a bit:
1. Go to your My Documents folder
2. Find "My Virtual Machines"
3. Right-click the virtual machine file <Your VM name>.vmc and choose "Open With"
3b. Choose Notepad from the list (deselect "always open with this program")
4. Find (Ctrl-F) or Edit Find "vram" (without quotes)
5. Change 8 to 16 and save
(taken from http://www.paraesthesia.com/archive/2007/03/20/video-ram-limitations-in-virtual-pc.aspx)