Running Linux inside Windows XP, ie no dual booting

Maybe this will help you: Portable Ubuntu Remix

"From the Cygwin web site:

What is Cygwin?
Cygwin is a Linux-like environment for
Windows. It consists of two parts:

A
DLL (cygwin1.dll) which acts as a
Linux API emulation layer providing
substantial Linux API functionality.

A
collection of tools which provide
Linux look and feel. The Cygwin DLL
currently works with all recent,
commercially released x86 32 bit and
64 bit versions of Windows, with the
exception of Windows CE.

Note that the official support for
Windows 95, Windows 98, and Windows Me
will be discontinued with the next
major version (1.7.0) of Cygwin, which
is in beta testing right now.
What Isn't Cygwin?

Cygwin is not a way
to run native linux apps on Windows.
You have to rebuild your application
from source if you want it to run on
Windows.

Cygwin is not a way to
magically make native Windows apps
aware of UNIX ® functionality, like
signals, ptys, etc. Again, you need to
build your apps from source if you
want to take advantage of Cygwin
functionality."

"I'm currently using virtualBox.
Free, and works nicely."

You can try VMware Server to install on your Windows and run Linux or other operating systems. Or you can also try Virtual PC which is what Microsoft will use to provide Windows XP Mode on Windows 7.

"I switch between Windows and a USB Booting Linux.
Sometimes keep the Windows in hibernate and do this.
However, the boot partition will not be accessible from linux this way.
Have found the Ubuntu install very smooth and comfortable for this activity."