Windows Virtual PC requires processor capable of hardware virtualization, with AMD-V™, Intel® VT or VIA® VT turned on in the BIOS to run XP Mode in Windows 7.However , VMLite a virtualization technology based on VirtualBox , can run XP Mode in Windows even if your processor is not capable of Hardware Virtualization.

The GUI of VirtualBox does not have an option to boot a USB drive (Physical Drive) in a virtual machine.
However you can attach a physical drive to a virtual machine using a command line tool that is bundled with Virtual Box.You can then boot your virtual machine from the attached Physical drive.

Just like how you can boot a computer using a bootable CD,you can also boot a computer using a bootable USB drive.
You can test a bootable USB Drive within Windows without restarting your computer.This is helpful when your motherboard does not support booting from a USB Drive.

You can easily test bootable iso without burning it to a CD and without restarting your computer using MobaLiveCD or Sun Virtual Box.
You can also test bootable CD/DVD in VirtualBox without restarting your computer.