The license says "END-USER LICENSE AGREEMENT FOR MICROSOFT SOFTWARE MICROSOFT WINDOWS XP MODE
(WINDOWS XP PROFESSIONAL SERVICE PACK 3 IN VIRTUAL HARD DISK IMAGE FORMAT FOR USERS OF WINDOWS 7 PROFESSIONAL, ENTERPRISE AND ULTIMATE EDITIONS)"
This means that if I upgrade to Windows 8, the VM becomes toast, according to some posts I've been reading.
I'm not obligated to run it under Microsoft's VM. I have it running using VMplayer, using Unity mode.