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: 
You are looking for something called P2V (physical to virtual) most VM solutions have it. But you will get better responses on server fault.
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