I use this site all of the time for helping me with getting operating systems running on Virtual Server / Virtual PC as some of them require specific configurations and installation steps.
I would suggest having a look at the site for good tips and tricks on a running a wide variety of operating systems on Virtual Sever and Virtual PC.
Followup from Vancouver Virtual Server Sessions.
On trying I found that, as stated, Virtual Server will install on XP SP2 with IIS installed for Visual Studio .Net. The Web Interface function fine (I have not progressed beyond there yet).
However, Virtual Server Migration Toolkit will not install on standalone XP. Any attempt to install all or part of it results in an error mesage that insists the Virtual Server Migration Toolkit (VSMT) will only install on Windows Server 2003.