I've been using VMWare Workstation on Windows. USB support is the main reason I stayed with it instead of going for free VirtualPC. Now I'm on Ubuntu, I want to try the free option again. This time it's Sun's VirtualBox. I didn't go for the open source one, as Sun has put some serious limitations on it. With the free-to-use edition, things are looking really good.
I had no problem setting up Windows 7. I allocated 2 GB for the VM and 40 MB video memory. The only issues I had with running it were sound not working, and I couldn't use VirtualBox video driver, which results in limited choice for screen resolutions. Neither is a big deal, but I'll try to figure it out.
Migrating a Windows XP virtual machine from VMWare worked even better than I expected. I followed the two advices here, then just told VirtualBox to use the vmdk's. The VM just booted and ran like a champ! I actually forgot to do mergeIDE before migration, but I may have done it at some point before since the VM has survived previous migrations.
One sticking issue is that PPTP VPN doesn't seem to work on a NAT'ed guest for now, which I hope gets fixed soon.
UPDATE: I was able to re-enable the virtualbox video driver in Windows 7. Not sure why the first time after installing it didn't work.