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While Microsoft has tried to prevent Virtual PC 2007 being installed on Windows 8, you can still install it and it still works!
But to do this you need to make a couple of edits in your Group Policy Editor (gpedit.msc)
Go to: Computer Configuration -> Administrative Templates -> Windows Components -> Application Compatibility
Enable both Application Compatibility Engine and Program Compatibility Assistant.
Reboot your computer. Download the Virtual PC installation, and then rename the setup file to something different, and then installation will proceed without restriction.
I have more details and pictures to help here: http://daniel-mitchell.com/blog/run-virtual-pc-in-windows-8-bypass-compatibility-assistant/
Hope this helps.
If by "upgrade" you mean to Windows 8 (any flavor), then you are done. Windows 8 does NOT run Windows Virtual PC. This "feature" has been replaced by "Hyper-V" which explicitly does NOT include "XP Mode". In fact, now Microsoft claims that "XP Mode" under Windows Virtual PC was just a side-effect [that marketing turned into a selling point]. Autodesk fully appreciates Microsoft's cooperation and stands ready to assist you in upgrading to a version of AutoCAD that is compatible with Windows 8.
Since upgrading Windows 7 or your machine? If it is the latter, my first thought is that the hardware might not support Windows XP mode due to the requirement that VT be built in natively by the CPU. Obviously, this wouldn't be the problem if you are using the same hardware as before. If your CPU doesn't support hardware assisted virtualization, then you can download KB977206 to run Windows Virtual PC without hardware virtualization.
Other than that, I'm pretty much drawing a blank. Good luck.