Second Virtual Box, however..... OP may want to note that there is limited graphics drivers support. I am able to run Photoshop CS3 in my Win XP VB install, however I would caution recommending it if you (both) use it professionally and do things that rely on GPU acceleration. VB does support pass-through 2d and 3d support, but I'm not sure how to enable that, the option has always been grayed out for me. I run AMD, you may need nVidia drivers. I have heard rumblings too that Windows after XP doesn't work so swell due to the way windows validates its key at startup. Do your research, but this may be a problem for you too.
Hardware wise, I recommend a quad core and at least 6-8 gb of RAM. You can get by with a dual-core and 4gb, and I did for years, but the price of an amd quadcore is so low these days, there's no excuse not to.