it seems like it's a lot of work to save $10. if you're not ready to move to Win8, just buy the license and stick with WinXP. no need to go to all this trouble to just let the installation sit in a disk image.
especially since Win8 is the new paradigm going forward for Microsoft. its design is pretty much here to stay. but worst case, there are lots of ways to make Win8 look and feel like Win7 or heck, even XP.