Izzybee you're absolutely RIGHT! You CAN run Windows Virtual PC (WVPC) on Windows 7 Home Premium. XP Mode requires Enterprise, Pro and Ultimate.
Refer http://social.technet.microsoft.com/Forums/en-US/w7itprovirt/thread/7c17c5b1-9c12-42d6-97e8-4c847c04e2e9 for more details where it has been clearly stated and I have seen users around running WVPC on W7 Home Premium.
Izzybee, you may post your query in the Windows 7 Virtualization forum for better support regarding the issue you're facing:
http://social.technet.microsoft.com/Forums/en-US/w7itprovirt/threads
Cheers!
'Tis all a chequer board of nights and days,
Where destiny with men for pieces plays;
Hither and thither, and mates, and slays.
In a world without walls and fences, who needs Windows and Gates?! Life sucks! Get used to it!