As was pointed out, you will need a system that has VT enabled and accessible to run the virtualized WindowsXP inside of WIndows7. That being said, you should be able to run Windows 7 RC inside a VM just fine, provided the VM thinks it is installed on a set drive and not a removable one. You can also get Windows 7 to boot from a .VHD file if you aren't hosting it in a virtual machine (VMware, VirtualBox, VirtualPC, etc). Beyond that, make sure the version you are installing matches whatever limitations your Virtualization software has. If you still have issues getting it installed or working, try posting on the official Windows 7 RC Support Forum located here:
http://tinyurl.com/9fhdl5
It is supported by product specialists as well as engineers and support teams. They are pretty quick to answer questions, and many questions already have answers and fixes if you poke around a bit.