Hi smoovo,
What I do is get VMWare Workstation.
Get your Windows XP CD. Install xp into a new Virtual machine.
Then copy it and use different copies for different versions of software.
I have 1 Virtual machine for IE6 and Outlook 2003
Another virtual machine for IE7 and Outlook 2007
And probably next year ill make one for IE8 and Office 2010.
Then I can test old IE as well as email templates in different versions of outlook.
The best part is you can give these VMs to other work collegues so they can test as well without asking for your help.
Another great VM app is Virtualbox.org
http://www.vmware.com/
http://virtualbox.org/
Good luck!