The newest version of the Crimson 3.0 emulator gives me a lot more trouble than older versions. I find myself going through a series of errors each time I use the emulator. The editor and the emulator still work even in my XP Mode, I just have to get past the errors first. With builds prior to support for the K2, I did not see these emulator quirks nearly as frequently. So, when I hit the "Update" icon while emulation is enabled, if I don't see a message that says "opening transport layer", I abort and retry until I do see that message, then it seems to run fine. If the emulator is running, I stop it first (give it focus then ESC). In most cases, one an error occurs and the emulator is running, you will never get past the error.
I can run it in XPMode using a windows XP SP3 OS on my windows 7 64 bit desktop.
The only other trouble I have is when it comes time to try to "talk" to a real PLC with the emulator in the VM, through the host to our PLC network. For that, I think I would need VMWare or another virtualization environment with more bels and whistles.
We still have 3 laptops with Windows XP and if I really need to use the emulator with a real machine, I fire up one of them.
What specific issues are you seeing with your XP Mode machine?