I made this tutorial when Windows 7 Beta came out. But it applies to any other operating system as well. I have run Ubuntu and Windows 7 that way. It is the easiest way to test an operating system because the installation is easy and so is the deinstallation.
I suggest to use Virtual Box and assign no more than 1GB of RAM and 25GB of dynamic disk space to it. Installing the system from an .iso that is parked in a folder is recommended. Installing from a CD will take longer.
On a 3GB or bigger system you can easily run both the host system and the guest system side by side and switch from one system to the other with one click. The performance of both systems should be very good - just give superfetch a little time at the beginning to arrange the real estate.
The instructions are in a PDF that you can download from here.