Further info on this...
In case anyone is interested, i've installed Parallels Desktop on my iMac this weekend and installed XP SP2 straight onto it. Installation of the whole thing (parallels and xp) took no more than 30 mins. There's now a neat little icon on the desktop that gets XP (or Vista if you prefer) running in around 20 seconds or so, and a click within the window activates XP or takes you back to OSX.
Screenshot attached FYI, the XP screen is at 1024*768
Note that Parallels is only suitable for intel-based Macs.