Most of these instructions are explained in more detail and with screenshots here so you might want to consult that too, but that was written for an earlier release and I found a couple of gotchas fow which I've gleaned answers so I thought it worth putting them here. I've used VMWare Player, which is free. There are alternatives, just pick your version carefully as not all will work with Win8. So here's a quick step-by-step.
Grab the 32 bit ISO from here
Install VMWare Player 4. Version 3.x doesn't work and will give you a "HAL_INITIALIZATION_FAILED" error (I know, I tried). VMWare Workstation 8 also works apparently, as do some versions of other virtualisation software.
Create a new VM. Just point at the ISO, wherever you saved it, and VMWare will do the rest. Pick "Windows" and then "Windows 7", don't put in a licence key. Let it go.
If you get an error saying "Windows cannot read the