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.
<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