With Boot Camp, does XP run natively? Or is it still "virtual?"
Yes, it is run "natively." That is when you Boot Camp, only Windows is running, OSX is not.
I guess the reason I ask is because I do play video games every once in a while. I've got a couple of games that I've never been able to play because my Dell Laptop didn't have enough juice with the video card. I've got the souped up iMac with 4 GB RAM and the NVIDIA graphics card, so theoretically it should be able to play the games. I tried both running on Fusion, and they wouldn't run. I think because they don't really see the video card, just a virtual video driver from Fusion.
That is correct. In the virtual machine, your game doesn't directly see the NVIDIA card. It sees a SVGA II card. So many of the more graphics intense games won't work.
I was wondering if installing Boot Camp might be the answer. If I did so, would this mean that I have a completely separate install of XP on my iMac? Would there be any problems with Fusion that is running just fine?
So yes, your answer may be Boot Camp. Your game will directly use the NVIDIA card. You already have a XP virtual machine and this is completely separate from the Boot Camp installation of Windows. You will need a separate license to install Windows in Boot Camp. (Or delete the XP virtual machine and reuse it's license. When you try to activate the Boot Camp XP, it may warn you that you've already activated it and would need to call Microsoft for activation.) Be sure to read the Fusion FAQ and other documentation on using the Boot Camp Windows as a virtual machine, if that's what you want to do.
I also use it to demo that a VM is as good or better than Boot Camp for many of the Windows apps that my clients have to run. For example, I show the client right-clicking in Boot Camp with a MacBook.
