It depends how much he wants to do with his pclos VM before he wishes to replace XP. You can get away without a swap partition but if you run out of RAM (and a VM has less RAM than a real machine) the machine will crash. I think it's safer to have swap. The machine will freeze while swapping, and VMs being slower will freeze for longer, but it won't crash.
As for letting the installer take the whole drive, doesn't that separate /home onto a different partition, thus limiting flexibility on a small virtual drive?
Besides, it's good to think about these things at the testing stage as it provides a better understanding for the real thing later on.