FAQ: Making a Smooth Move from XP to Windows 7
Or you can run free virtualization software on Windows 7, such as Sun's VirtualBox, with a copy of Windows XP as the "guest" OS within the virtual environment. You'll need an XP license to install inside the virtual machine.
That may be your biggest hurdle, since if the copy of XP you're now running came with the PC, you're not allowed to transfer it to another system, even a virtual one (even if that PC is now running Windows 7). And if you're upgrading from XP to Windows 7, no matter how you acquired the license for XP, the activation key on the XP CD will probably not work. (During the upgrade, the PC sends a key-cancellation request to Microsoft's servers to nullify the XP activation/product key and link the machine to the new Windows 7 key.)
You can still buy copies of XP, but they're pricy. On Newegg, for example, we found a copy of XP Home (the OEM edition, designed for small computer makers, but you can use it, too) for $90.
What happens if I hate Windows 7. Can I revert to Windows XP? Yes, you can, but you'll have to do another "clean" install, this time scrubbing the drive of Windows 7 and replacing it with XP.
Before you do that, you'll need to back up your data files and note your settings. Don't bother with Easy Transfer Utility, which is available for XP; it's a one-way street and doesn't help in "downgrade" scenarios, which is what we're talking about here.
You'll need to reinstall all your applications on XP, too.
If you thought of this before, you'd simply wipe the drive and restore from the disk image you made earlier (see "What should I do before I start the upgrade?").