Problem with virtual XP in 7

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Being new to windows 7 I have installed virtual windows to run all my old XP programs. However, installing "Unreal 2" I get the following message: Please enable Direct3D acceleration. You can do this by starting dxdiag and enabling Direct3D Acceleration in the Display 1/2 tab after installing DirectX 8.1b (or later) and the latest drivers for your graphics card. Following these instructions though, I find the Direct3D Acceleration feature is greyed out? Can anyone tell me where I go from here?
Thanks
 

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