If one wants to run a virtual machine on Windows 7 Windows Virtual PC is the official way to go.
It requires hardware supported virtualization though, which means not everyone's machine can do it. On my HP 8510w it meant a cold reboot - just restarting and changing the BIOS was not enough.
The older VirtualPC2007 doesn't need any hardware virtualization stuff and a small text about how to install it is found here: http://blogs.msdn.com/virtual_pc_guy/archive/2009/08/19/running-virtual-pc-2007-on-windows-7.aspx
It looks like Microsoft wants everyone who installs Windows Virtual PC to also install Windows XP Mode by some reason unknown to me. I am a developer and I am hesistant to installing apps that might tweek the OS.
The whole page at http://www.microsoft.com/windows/virtual-pc/download.aspx pushes you into installing Windows XP Mode but if one selects a system at step 3 two buttons pop up and one of them says "Windows Virtual PC".
Download and install. But instead of the usual application GUI one gets a view of a folder under C:\Users\username\Virtual Machines prepared for virtual machines. This might be good for people who backup what is under their personal account but as a developer I don't want to tie my data to an account and instead prefer something like C:\DATA\VMACHINE\.
Come to think of it - is it good for anyone?
It also took me a while to find out how to create a new virtual machine. Instead of having an app with a button or menu as is de facto standard someone has decided to hide the button in the toolbar or extra menu system ( I have never figured that out. )
Don't bother to cut and paste the .vmcx file to some other place. It will be copied but not removed so you end up with the original .vmcx file in the original place and a not functioning copy of it in your target directory.
The .vmc file can be run though.
Mount an ISO with your preferred OS on the virtual D: drive. The virtual machines chews through your NICs and DHCP. I had my WLAN card turned of in the host OS, but the virtual machine seemed to first look for my WLAN card and then my regular one.
The rest looks just like ususal.