Microsoft actually offers VMs for testing various incarnations of IE. They can be kind of a hassle (I think the Win 8 based ones are timebombed and you have to periodically download a new VM), but they work and are free & legal. http://modern.ie/en-us/virtualization-tools
http://modern.ie/ ? Microsoft's got VMs for almost every IE/OS combination you could want.
Edit: meaning, why are you limiting yourself to just XP. I realize that was unclear.
Now this is cool. Thank you for sharing the link.
I have found it to be pretty slow and painful.
Huh? I am using VMs from modern.ie (among others). You need XP to run IE8. The IE8 VM is XP.
You can't test current IE (beyond IE 9?) on XP.
Right, and you can't test IE older than 9 on XP... so you need at least two VMs depending on your requirements. I still see a fair bit of traffic on IE8.