Nearly missed this. The news is a few weeks old but here goes:

From Paul Thurrott’s SuperSite Blog 18/3/10

Although I’m pretty sure it’s Windows Virtual PC that had required hardware virtualization support, and not XP Mode. XP Mode, of course, requires Windows Virtual PC and Windows 7 Professional or higher. Anyway, semantics aside, here’s the news from Microsoft:

We’re announcing an update to Windows XP Mode today that will make it a more accessible to PCs in small and midsize businesses who want to migrate to Windows 7 Professional but have applications that still require Windows XP. Windows XP Mode will no longer require hardware virtualization technology to run. This change makes it extremely easy for businesses to use Windows XP Mode to address any application incompatibility roadblocks they might have in migrating to Windows 7. Windows XP Mode will of course continue to use hardware virtualization technology such as Intel VT (Intel Virtualization Technology) or AMD-V if available. You can find more information here