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Windows 7 XP mode failing to start

I have a new Dell Optiplex 980 desktop with windows 7 professional 64 bit.  I downloaded windows xp mode from microsoft, installed, and created a virtual machine.  When starting the machine it tries to start and then goes to the Windows Boot Manager with status 0xc000035a, Attempting to load a 64-bit application, however this CPU is not compatible wiht 64-bit mode. User generated image
I've enabled Virtualization in the bios.  I've searched around and know virtual pc doesn't support 64 bit guest os's, but I would assumpe the xp mode downloaded from microsoft would be 32 bit?
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Anil
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I downloaded XP mode right from microsoft, so its the latest version. It installed fine and I can create a virtual machine.
Hi,

Did you try with the virtualisation option "disabled" in the bios to see if it spits out a different answer or problem.

Regards,

A.
Windows Virtual PC does NOT support 64-bit Virtual Machines.
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My processor does support virtualization.  Its a new Core i7 chip.  
akajohn - if I completely turn off the virtualization the bios xpmode won't even start, just get an error saying unable to start windows virtual pc because hardware-assisted virtualization is disabled.
It's difficult to understand from your posts ...

Is VT Enabled in the BIOS or not?
Did you install ALL THREE downloads/updates for XP Mode?