Well, all contemporary simulators work in XP, even FMS.

The questions are:

1) Which of "affordable" simulators is worth getting (helies in FMS are a joke).

2) Which TX-to-PC interfaces work under XP. An example of interfaces supported under XP is: www.milehighwings.com .
There are plenty of other vendors selling XP-compatible interfaces--just make sure that their interfaces indeed work in XP and that they are compatible with with many R/C sims, not just FMS.

Hope this helps,
Boris