can someone explain to me what will happen to my XP installed programmes which I run under Win7 if I remove the XP OS from my drive? Do I need to re-install all these on Win7?
I'm confused, how exactly are you planning to remove XP from your drive and yet not remove your programs or data ?
Does the 'Run as XP' option require the XP OS? I guess it will need the XP registry?
Of course not. Everything that function needs is built into Windows 7/8.
As a 'supplementary', is there an option to continue with XP on my machine but with internet access disabled for it (XP) or will it still be 'vulnerable'?
Only in a truly and permanently disabled form... i.e. it will never, ever be connected to a network cable or WiFi hotspot ever again.
You of course would also need to ensure you don't infect it via indirect vectors (e.g. plugging USB sticks in).
Basically, the only place for XP is the bin.