I agree with Jon. I would not risk installing side-by-side unless you are comfortable with the possibility that you will end up having to remove them both and reinstall just to get back to one that works properly.
You might want to look at Virtual Box instead of Virtual PC. VPC has a lot more functionality, but Virtual Box is more than enough for this purpose and is freeware.
There is one other option, and that is to try to find what is called "Office 2007 Portable." This is a version of 2007 that has been built using a program called Thinstall which is basically a runtime virtual machine that compiles an entire app install into a single executable. You end up with a single Excel.exe file which contains everything you need to run Office in it's own virtualized space. I am no advocate of software piracy, but if you legitimately own an Office 2007 license, I don't see why it matters what media you choose to run it from.
Personally, I do run both 2003 and 2007, but in a differentw way. I have 2007 installed on my main PC and 2003 installed on the old PC I use as a server. The server's headless and stashed away, but I remote into it using LogMeIn Free from my main PC so in a sense it is side-by-side. The plus to going this way is that performance is not crippled by the virtual machine overhead.