What you'll need
- Virtual Box - free download from Oracle
- Virtual machine images of Windows with IE - free downloads from Microsoft
- A network driver - free download from Redhat
I installed version 4.0.0, current as of Jan 2011.
2. Download the Virtual PC disk image (from Microsoft).
For instance, let's start with IE8-on-XPSP3. You'll need an app to open the self-extracting archive (IE8-on-XPSP3.exe) file that you downloaded.
If you don't have Unarchiver, UnRarX or Zipeg, then download Unarchiver. Double-click on the TheUnarchiver .zip file and it will extract the application. Move the The Unarchiver to Applications.
Then find the .exe file and right-click on it and go to Open With -> Other... and scroll down and select The Unarchiver. That will create a folder called IE8-on-XPSP3 and inside will be the the .vhd file that you'll use in Virtual Box and a ReadMe.txt that will say what the login password is for the virtual machine.
3. Down the Paravirtual (virtio) Driver (from Redhat)
Download the .iso file which you will be able to mount in a Virtual Box machine.
4. Create a new virtual machine in Virtual Box
Start Virtual Box. Go to the File menu and click Virtual Media Manager. Find the .vhd file (from Step 2 above) and drag and drop it into the Virtual Media Manager window. Click OK.
Click the New button on toolbar in Virtual Box. Enter a name (i.e. "IE8 on WinXP"). Make sure Operating System is "Microsoft Windows" and Version is "Windows XP" and then click Continue.
Leave Memory at 192MB. Click Continue.
Click "Use existing hard disk" and select the .vhd file name. Click Continue. Click Done.
Important: Before starting the virtual machine, set the Network adapter. Select the new virtual machine in VirtualBox (click Details tab, if not already selected). Scroll down to the Network section and click on the word Network. Click the right arrow next to Advanced and set Adapter Type to "Paravirtualized Network (virtio-net)". Click OK.
Start the virtual machine by clicking the Start button in the toolbar. Login with the password mentioned in the ReadMe.txt file (step 2 above).
Click Activate Later. You can't activate until you have the network driver installed.
5. Install the Guest Additions
This step isn't necessary, but it will make your life easier by making the mouse-handling in the virtual machine natural.
Inside the newly booted virtual machine, press the left Command key to release the mouse and go to the Devices menu (top of Mac screen) and click Install Guest Additions. This mounts a CD drive in the virtual machine and the autorun on the CD prompts you to install software. Ignore the warnings about unvalidated software and install everything. At the end click Reboot later. You can reboot now, but it's faster to install the Network Driver first.
6. Install the Network Driver.
Press the left Command key again and got to the Devices menu and move to CD/DVD Devices and move right to "Remove disk from virtual drive". Go back to the Devices menu and move to CD/DVD Devices and move right to "Choose a virtual CD/DVD disk file...". Locate the virtio-win .iso file you downloaded in step 3 above. Select the filename and click Open.
In the virtual machine, click on the Start menu and then right-click on My Computer and then click on Manage. Click on Device Manager in the left panel. In the right panel under Network Adapters right click on Network Controller and click "Update Driver...".
Click radio button for "No, no this time". Click Next. Click Next again. Click Okay to the warning about unverified driver.
You should now have a network and can activate Windows. After activating your virtual machine should be good for 30 days.
You can now reboot your virtual machine.
Notes
I recommend not using the Q app to convert the .vhd file to a .vdi file. This will allow you to run multiple virtual machines at the same time, but I believe it violates the EULA for the virtual machine from Microsoft. See the VPC_EULA.txt file that you downloaded in Step 2 above.
I also recommend against using AntiWPA instead of activating Windows because this also probably violates the EULA.