Windows 8 does not support Virtual PC although Windows 7 does.
I use VirtualBox in Windows 8.1 to run Linux applications and they perform quite well.
I installed Windows 7 in VirtualBox and it also ran quite well, although it clearly was a bit slow, though not bad.
I never tried XP, but it would probably run a lot faster in VirtualBox on a newer machine than natively on a older one.
It's free and easy to set up, so you could try it out easily.
I set up a shared virtual folder so I can send and receive files from my host to Linux and back.