I have a new laptop with windows 7 home premium, I need to upgrade to windows 7 professional as i need xp mode. Is it just a case of me buying any windows 7 professional upgrade?
I would run this first to insure your laptop processor can support hardware virtualisation, which is used/required by the Win 7 built in Virtual PC. In any event you can download and install for free the older Virtual PC 2007 (VM hardware not required) and create your own virtual XP Machine from a XP install CD. You could also use Disk2VHD to convert (rip) an existing PC into a VM. Virtual PC 2007 can be downloaded from here and SP1 (which is think is actually the full updated program) here, it will give a warning about the OS not supported but should still work.