I have a 3 year old laptop running Windows XP that I used for business.

Although I have not used the laptop in over a year, I now want to re-commission it with Windows 7 and a fresh install.

Before I do the fresh install I want to create a Virtual Image of the laptop that I can keep and potentially run on my desktop machine should I ever need to access any of the old files/projects that it contains currently. I know that most people will say just copy the files over to your desktop, but my concern is the configuration of the laptop. I used to use it for development and it has older versions of Visual Studio, SQL Server, Active X controls etc, etc than I currently use so I really want to preserve the environment not just the files.

So really I am asking what is the best tool-set/method to achieve this?

I understand there are free VM tools available but I have never done this before and would appreciate any help.