For creating a brand new WindowsXP VM:
C:\Users\bigleftie\Virtual Machines\WindowsXP.vmcx is created when you choose "Create virtual machine". It is the file that you "double click" on to start the VM.
Right click on WindowsXP.vmcx and choose Settings.
In the Settings on the left, choose Hard Disk 1.
Browse and select "C:\Users\bigleftie\AppData\Local\Microsoft\Windows Virtual PC\Virtual Machines\WindowsXP.vhd".
The .vhd file is the virtual hard drive. It is the most important file - since new Virtual Machines can be made by simply choosing "Create virtual machine" and selecting the VHD file as the hard drive.
NOTE: WindowsXP.vhd is a fresh Windows XP install with some additional software already installed.