Need Help with a Tough Recovery

Hello,

I need help regarding a backup and restore I'd like to do. Here is my scenario:

I have a XP pro machine that will no longer order boot into windows (boot loop).

I purchased a new Windows 7 machine and I'd like to make an image of the XP pro machine and make a VM of it on my new Win 7 machine.

What would I need to purchase (software wise) and any help with the procedure I would need to do this would be much appreciated.

Thanks