Parallels seems to be the ideal solution for everything but gaming, but I would like to game too.

Could I have a single installation of Windows XP and boot onto it through both Parallels and BootCamp?

Thanks

Yes. And you can do that with Vista or XP using either Parallels or VMWare Fusion (which is currently free since it is on Beta 4)

So, to do this should I install XP first through boot camp or parallels/VMWare? And which should I choose, VMWare or Parallels?

Thanks again!

In order to do this:

1: Download and install BootCamp
2: Run BootCamp to partition your drive and burn a driver CD
3: Insert Windows install disk (XP Pro SP2 or Vista)
4: Restart Mac and install Windows normally, onto the partition that you created (I think they label it C for you, but I could be wrong)

After you have Windows installed, updated, drivered, updated, AVed, updated, and then you know, updated... boot back into OS X by restarting and holding ALT.

5: Install the trial of VMWare and Parallels (you don't know yet which you prefer)
6: Using their easy to use wizards, VM the BootCamp partition... make sure you are doing this separately, you don't want to have both VMWare and Parallels open at the same time
7: Play with Windows to figure out which one you prefer.
8: Buy the one you like, delete the other.

I prefer parrallels. And you can run it off of your bootcamp partition as well.
Best of both worlds.