Question: Is there a way for me to take my current PC and transfer it to a VM running on the same machine or another machine?

I am currently running Windows XP.

Answer: 
When using VMWare, there's a tool called [VMWare Converter](http://www.vmware.com/products/converter/) that can make a VM image out of your machine.
You don't mention which VM you're using, but I've had some success using the [VMware P2V Assistant](http://www.vmware.com/download/p2v/). I have had a few HAL issues trying to boot (BSOD) images generated from P2V, but they can usually be resolved by removing most 3rd party drivers and replacing HAL.DLL and NTOSKRNL.DLL