Yes, http://www.longbowsoftware.com is great software.
I am using it and works well. Not problem to install 32 bit autocad on 64 bit system.
XP Mode 32 bit should be the same as having normal XP on a 32 bit system. So you can run versions in XP Mode 32 bit "the same" as you would have with XP 32 bit.
Only you probably have to tweak it a bit because it won't be going as smooth installing it as normal XP. And can cause several problems with AutoCAD.
But yes, I managed to install AutoCAD 2010 32 bit on a 64 bit machine. (needed it for additional software AutoCAD that only worked on a 32bit machine)
Just so you all know, we are using the Longbow Converter tool to run our 32bit AutoCAD on 64bit Windows and we are having no problems at all - perfect, runs beautifully.