Ok i just installed windows xp on my Imac (last years model) and i am trying to install software. but i get this window that says "found new hardware wizard" then takes me through trying to install the cd-rom. do i have to do this to install my software?
Macgic, after you use Bootcamp to setup the Windows partition on a new Mac, or a newly formatted hard disk, you install Windows. Once that is done, you boot into Windows and insert the Leopard install DVD as all the necessary Windows drivers are on that disk. The Bootcamp (under Windows) program will load and begin to install the drivers that Windows is looking for. Once that is complete, after 2 reboots if I remember correctly, Windows should have all the drivers it requires.
Just to clear up some of the questions you posed:
When to use Bootcamp:
1. You wish to play games and require accelerated graphics i.e. games that require DirectX 9.0c or older (Windows XP supports up to 9.0c)
2. You have a specific Windows program that requires accurate timing on USB or serial ports i.e. midi based or controller software for external hardware machines (this is rapidly being addressed by Virtualization software vendors)
When to use VM Fusion/Parallels:
1. You wish to play games and the requirement is only for DirectX 7 or DirectX 8.0 or with no full graphics acceleration i.e. some of the older games like Duke Nukem 3D or even Starcraft
2. You wish to run a Windows application but remain in OS X and/or move files seamless between the two operating systems.
Virtualization these days has been optimized to the point where a performance hit of 5% or less is common and that should be so small as not to concern you. The Intel Core architecture has VT on the chip to support virtualization.
Keep in mind, this is virtualization, NOT emulation and NOT translation. Dont let others tell you otherwise.
My recommendation for virtualization on OS X these days is with VMware's Fusion, however Parallels is just as capable.
Let me know if you have any other questions.