Can SEP run on a Virtual PC XP Mode

Hi, We have an application which is still 32-bit. It can run under Windows Virtual PC XP Mode (on Windows 7 64-bit workstations). The problem is that while SEP 12 is installed on the Windows 7 machine, the virtual PC does not have any antivirus software installed.

Can SEP install on the Virtual PC XP Mode?

Do we have to install SEP on the virtual XP PC or the SEP that is installed on the host (WIn 7) will protect the Virtual PC XP?

Thanks,

Gadaffi