I've never had a problem with XP activation inside a virtual environment. I've used the same image on an Atom 330, Sempron 3200+, Celeron E3300, Pentium E5200, Pentium E6300, Core 2 Duo E7200, Core i3-530, Phenom II X6 1055T and Core i7-860 and not once have I been prompted to re-activate. That's with a TechNet (FPP) key, though.
As for just reporting an older CPU, part of the reason virtualization is fast is because some resources such as the CPU is mostly transparent to the virtualized OS. Emulation is much, much, much slower.
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