>Thomas:
> What would I need to copy, the c:\windows and "c:\program files" folders and their subfolders?
>
>Jerry

If you're trying to transfer an installation of Windows you'll have to copy more than that (and the critical files aren't going to be directly accessible from within Windows). Basically you need to effectively do what you'd do with actual harddisk:
A. take the harddisk from old computer and install it in new computer
B. image the old harddisk and make duplicate on new harddisk that is installed in the new computer.
once you've got the harddisk into the new computer, you boot and go through the configuration process. For a VM, the "harddisk" is actually a file that represents the contents of the harddisk (the format depending on the particular VM system you're using) -- meaning that option A isn't really availble. This means you have to use some program to image the original harddisk, then transfer the image to the VM. Let's say you're using Acronis TrueImage, you'd do the following:
1. boot the "old" computer using special boot disk
2. Image harddisk, send image to external harddisk
3. Prepare the VM, and configure it to boot from CD
4. "capture" the special boot disk so it boots from it
5. Attach the external harddisk to which you copied image in step 2
6. Use image and restore into virtual harddisk
7. When copy is complete, detach the CD from VM session, reconfigure VM to boot from (virtual) harddisk
8. Follow through with the reconfiguration of Windows


If the above process seems too complicated, then perhaps starting from "scratch" with a fresh install (provided you have install CD) might be more straightforward.

If even that is too confusing, then simply purchase upgrade from Home to Pro or Ultimate (and for my own purposes, I'd likely opt for Ultimate -- it offers ability to change language). With that you'll be able to download a preconfigured and activated VM that has XP Pro.