If you wanted to run, say, Windows XP in Windows 7, you could use Windows Virtual PC and install a fully functional copy of Windows XP SP3 in a virtual machine running inside of Windows 7 Professional, Enterprise, and Ultimate versions.
For Windows 8, Microsoft has dispensed with this for the more powerful and feature-rich Hyper-V virtualization platform.
The Hyper-V virtual machine manager was originally built into Windows Server. Now it is included in Windows 8 Pro and Enterprise versions, though not installed by default.
To use Hyper-V, you go to the Control Panel, click Programs, and select Turn Windows Features on or off. Choose Hyper-V and click the OK button. After Hyper-V is installed, you’ll need to reboot the PC.
You end up with Hyper-V (the virtual machine manager that runs the VM software) and the Hyper-V Manager, where you create or remove virtual machines and .VHD (virtual hard drive) files. Once you’ve created a VM, you can install any OS you want, including Windows 3.1 through Windows 8, Linux, BSD, and others.
If your choice is XP in the virtual machine, unlike the old XP Mode in Windows 7, you’ll need a valid Windows XP license key to install Windows XP into a virtual machine.
The Windows 8 version does not include some features from the server version, such as GPU virtualization (no 3D acceleration in Windows 8 VMs) and a couple networking features (such as fibre channel support).