If you just need XP for some basic school work (word documents, powerpoints, etc...) I would say download Sun VirtualBox and create a virtual machine through them. That way you don't have to create a dual-booting machine and it will be extremely easy to access from your Win7 Desktop.
I honestly do not have experience with "XP mode" in Windows 7 because I'm still using Vista :/, but I do have experience with using XP and Ubuntu with VirtualBox and have been very pleased with the results.