Technically, you are required to purchase a second Microsoft Windows license before you run it on a virtual PC.
Now, since you obviously have a PC with Windows already, and since your obviously not a business, and since its not you installing Windows on a separate physical machine:
If you have an older CD, before Windows Genuine Advantage, you can use that and not have serious license issues. Just dont install any Windows updates... disable them completely. Preferably, if you can, dont even let the VPC connect to the internet.