For some people, a small window is going to be fine. However, if you need to run several Windows XP-based apps, you will no doubt want a larger workspace. By default, Ubuntu comes with two virtual desktops, but you can add as many as you want. There are three variations of giving XP a dedicated virtual desktop: seamless, fullscreen, and maximized.
Choosing Seamless Mode from the Machine menu makes the XP taskbar dwell right above your host OS's bottom taskbar. In Seamless Mode, the XP desktop disappears and the XP taskbar, Start Menu, and any running apps appear to run directly on the Ubuntu desktop. Below are screenshots of my Ubuntu desktop normally, and with XP in Seamless Mode.
This makes VirtualBox act very much like the actual XP Mode in Windows 7. Unfortunately, like VirtualBox's Seamless Mode on a Windows 7 host, VirtualBox has some ugly graphical bugs. Though it's not as bad as in Windows 7, in Ubuntu, the XP taskbar appears and disappears randomly. When the taskbar does grace us with its presence, all the Linux host's icons and panels disappear and vice versa. Clicking around with the mouse usually fixes this. Also, when dragging XP windows, there is a lag in rendering the window onscreen.
Alternatively, you can completely fullscreen your XP VM by selecting Fullscreen Mode from Machine in the menubar. The downside with Fullscreen Mode is that you'll need to make keyboard shortcuts for switching desktops or press right Ctrl+F to switch between XP and Linux.
If I had to use Windows XP in a virtual machine, I'd maximize the VM in its own virtual desktop. By now you've probably noticed that after we installed Guest Additions, maximizing the XP VM automatically changes the XP resolution to fill the window. So, with the XP window maximized, I can easily switch to and from the full Windows XP experience without needing keyboard shortcuts for Fullscreen Mode or the quirks of Seamless Mode.
However you plan on doing it, any of these options allow you to use XP without dual-booting. I always use four virtual desktops in Linux, so I'll move the XP VM to the fourth position. Using the Compiz Fusion expo plug-in, I have taken a screenshot of all my desktops to illustrate what I mean.