Can I run Windows 7 64-bit via a VM on a Windows XP 32-bit host?

"Shortly, VM won't help you.

32-bit in name of operating system [kernel] means that it (and it's applications) is using 32-bit pointers to address the physical and virtual memory. There is no way for 32-bit application to access more than 4 GiB of memory at once, and part of applications' address space is taken by kernel: whole 4 GiB of possible memory addresses are split into two zones: this is 2 GiB for kernel and 2 GiB for applications by default. Again, this splitting is only valid for virtual memory: two applications can use both 2 GiB of this memory but take it from different parts of physical memory. This limitation applies to kernel as well.

You can do two things:

Change the virtual memory splitting. It is surely possible on any WinXP installation and will give an additional 1 GiB of memory for use in applications: afterwise it's will be possible to use upto 4GiB of memory at once for the system, but 3 GiB (instead of 2) for each application.
Enable PAE (physical address extensions). This will still allow applications to use not more than 2 or 3 GiB of RAM depending on virtual memory split but afterwise your system will gain access to all of your memory (maximum is 64 GiB really; it surely won't be met).

Here are two links to MSDN articles: one about enabling 3GiB split (it won't tell you how to enable PAE despite it's URI) and another about enabling PAE. As a summary, you need to put /3GB and /PAE switches accordingly in boot.ini for your kernel (don't forget to backup old boot entry!).

At last: even if you will enable both 3GiB split and PAE, the VM won't get more than 3GiB of memory. Never on a 32-bit system."

"You will be able to run 64-bit/x64 inside a virtual machine on 32 bit Windows (as long as you have a compatible CPU with the VT bit or similar), however, it will not be able to see the additional ram (apart from PAE as Phoshi said, however again, it is no replacement for 64-bit Windows).

If you have a spare copy of Windows 7 x64, if I was you, I would install that as my main operating system and take full advantage of the 8GB of memory."