Virtualization is definitely the way to go here and in case it isn't clear, it is fairly straight forward to achieve. It would go something like this with Virtual Box (which is free and easy to use):

- download/install VBox http://download.virtualbox.org/virtualbox/4.3.26/VirtualBox-4.3.26-98988-Win.exe
- put your first Vista CD/DVD in your drive
- open VBox and press the button to create a new virtual machine (there is a wizard step-by-step process that takes you through the next few steps)
- when asked, tell it that you want to use Vista 32 bit as the guest operating system
- pick a level of memory to assign to the virtual machine
- choose to create a new virtual hard disk, pick a size for it (you have the option for a fixed size file that it stores the VHD in or a dynamic one, pick the dynamic option, that way the file will only grow as you add data to the virtual machine)
- press "Start" to boot the virtual machine
- VBox will ask you which drive you want boot from, pick the one with your Vista disk

After that, you are just in a normal Vista install.