Just in time for the imminent release of the Windows XP SP3 update, VMware has released an update to its Mac-based Fusion virtulization application, with full support for SP3 Boot Camp partitions. The Fusion 1.1.2 update also includes a number of bug fixes as well as improved support for the MacBook Air--solving a few issues Fusion had with the Air's virtual disc and its Superdrive.
Perhaps the most imporant aspect to the Fusison 1.1.2 update, however, is the ability to back up virtual machines with Time Machine:
"Prior versions of VMware Fusion automatically excluded virtual machines from Time Machine backups to avoid hitting a Mac OS X-related crash when backing up running virtual machines.
Apple has addressed this issue in Mac OS X 10.5.2 and VMware Fusion 1.1.2 enables Time Machine to back up virtual machines on Mac OS X 10.5.2 and later.
NOTE: As part of the back up process, Time Machine makes duplicate copies of all non-excluded files, as those files change. As such, Time Machine will make a new copy of any virtual machine that has run since the last time Time Machine ran. Because virtual machines have a tendency to be large files (just like iMovie projects, or Aperture Libraries), and might take up large amounts of space with duplicate copies on your Time Machine hard drive, you may want to consider manually excluding certain virtual machines from backup in Time Machine’s preference pane."
Two other mainstream options for running Windows on an Intel Mac are Parallels Desktop for Mac and Apple's Boot Camp. Apple has recently updated Boot Camp to be XP SP3 compatible. As of yet, however, Parallels has not followed suit.
The Fusion 1.1.2 update is free to existing Fusion users.