I haven't tested it (yet), but Farstone VirtualXP is free for non commercial use...
[url]http://www.farstone.com/software/VirtualXP.php[/url] author wrote:For the sake of allowing users to keep running applications and accessing data on XP, FarStone developed VirtualXP to convert XP system to a Microsoft virtual disk, which can be run on Windows 7/8 or Windows Server 2008/2012’s virtual machine. XP virtual machine is safer since it runs above Windows 7/8 or Windows Server 2008/2012 platform with extra security protection from the host environment.
Key features: convert Windows XP to virtual machine; free for non-commercial use; allows you to continue running XP and its applications on Windows 8; VirtualXP can convert Windows XP and 2003 systems.
For reasons I'm not clear on, my buddy wasn't able to get the volume to work with VMware so I sent him this. I'll post here again if I hear back about it. For whatever reason they didn't want to use Microsoft's Hyper-V.