Can this actually run OSX under a Windows XP host?

No, not at all.

The idea seems like an inexpensive way to try it out.

Were that it was that simple.  Virtual PC allows a G5 to emulate a
Pentium chip in software.  The prior attempts, Cherry PC et al., to
allow a P4 to emulate a G3 were pathetic.  This is one reason why the
switch to Intel surprised many people, myself included.

I wonder what people are using the 2000 under XP solution
for as I see no benefit to that at all.

I am a little unclear myself.  But it would, for example, allow a
developer to test an application on both environments with a single PC
without dual booting and partitions.

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