Hardware virtualisation?

In a forum on Windows 7 I encountered a post where someone queried whether an older machine would be able to support ‘XP mode’, as the hardware pre-dated virtualisation and thus wouldn’t support it.

I have a couple of VMs but don’t know much about the technical side of it – does anyone know if any specific hardware compatibility is required to run virtual machines, and if so, in what this consists? Many thanks, all.