I have heard people saying in order to mod this game we might have to set up a virtual driver for windows xp.
That's not true. The devs need to that in order to make changes to the source code, because the version of Visual Studio they used to make the game doesn't work under the newer versions of Windows (Vista and above). However, modding the game isn't affected by this.
Is there any major differences between xp modding and windows 7 modding?
There are no differences.