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: 
<http://technet.microsoft.com/en-us/sysinternals/ee656415.aspx> has a tool for converting a physical machine to virtual. Sysinternals has some good tools and you can try it for free, so not much to lose
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