Yep, PCMover does not seem too suitable here.
However, on Zinstall's website it says: "Got a new computer and need to transfer everything from the old one? No matter the scenario, Zinstall XP7 will do the job!"
So it does seems suitable.
Merry, The Zinstall7 implies that it moves the whole XP and all the programs and that they will function correctly on the new laptop. Is this because I'd then have both XP and Win 7 on the laptop and the old programs would continue to function within an XP OS on the laptop side by side with Win7?
If so, is there any downside to this?
Yes, Zinstall would allow you to switch between a sort of "Windows 7 view" and a "Windows XP view", with all the programs working.
I personally think it's an upside - since it would look like your old XP on one hand, and not trash your new Windows 7 into oblivion by trying to insert old, incompatible apps.
Only downside I can think of is that if you need an app to work with some special hardware (like a TV-capture card I use), you'd need to install the program straight on Win7. Otherwise, everything should be fine.
Anyway, they seem to have a refund policy (unlike PCMover...)