I did look for the forum but couldnt find it. I have downloaded virtual pc console from here iv made a windows xp save but what do i do when i get to this bit in the pic.
You need to install Windows XP like you would do on a normal PC. Put the Windows XP CD in your first CD rom drive and it should be picked up by the virtual machine. If you have XP pro or ultimate you could just install Windows XP mode is basically a pre setup Windows XP in a Virtual Machine.
You don't sadly, it has the graphics power of a dead horse. I believe VM Ware is pretty good when it comes to graphics in virtual machines, however ive not used it myself.
https://www.virtualbox.org/ is a flexible and a good alternative to virtual pc you can configure alot of settings to get windows xp working good.virtualbox is a free program