Hmm... About XP. Take a look at BartPE. That thing creates a version of M$ Windows XP that boots from a CD. It needs the XP SP1 files and copies them to a dest dir, and finally creates the iso. I'm too lazy to try building it again( I had it a few months ago and I lost it).
That thing removes the fat and boots a custom windows graphic shell(explorer would give you 8=====D, because of read-only FS of the CD)
I don't remember what can be run under it though.
Now vmware allows to mount an iso as a CD-ROM ...
I'll try this thing when I have a keyboard connected to the box
About bochs:
WTF? ROTFL! OMG, FFS, STFU

If you want a x86 emulator that doesn't suck, try
http://www.qemu.orgIt's kinda, errm... SIXTY FIVE TIMES FASTER than bochs. That may mean a Pentium Pro 200 instead of a i386 16MHz
You can only run it under XBOX Linux though. It can run DOS, WINDOWS, Linux, Darwin, BSD, BeOS, whatever you throw at it.
I'm been thinking about compiling a small gentoox linux kernel and a ramdisk, cutting all the fat, just to boot this beauty. With a linux kernel patch provided on that website it runs even faster.