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.
[XenConvert](http://www.citrix.com/contentproblem.asp?url=%2Fenglish%2Fss%2Fdownloads%2Fdetails%2Easp&qs=downloadId%3D1855017%26productId%3D683148) did an amazing job on converting out SVN\Build server to a vhd, and its free!