Revisiting this question - the best thing that you can do for this is to run your VM off of a solid-state drive.
Adding an SSD to my system (OCZ Vertex 3) dropped compilation times by 80%. The problem is that Visual Studio is very intense in disk accesses, and when running a VM, this is a big problem (since the VM is just one giant file).
Looking at the disk queues in resource monitor, the difference was apparent. With a 7200 RPM drive, the queue was stacked at over 300 queued requests during compilations. With an SSD, the queue never went above 5 requests.
Would highly recommend an SSD for anyone else in this situation.
1There isn't really much you can do aside from adding more RAM to the VM and making sure the VM is using all your CPU cores, if applicable. – Sasha Chedygov – 2010-09-20T07:23:32.037
5Do you absolutely have to run VS inside XP Mode? Can't you create a duel boot? Why create the problem in the first place? – JL. – 2010-09-20T16:52:46.443
1If you spend THAT much time in XP. . . – surfasb – 2011-07-13T09:32:39.180