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I find that any time I'm looking at updating or reloading my operating system, it's a good idea to make sure the BIOS is up to date at the same time, so to answer your first question, I'd suggest updating the BIOS first and then loading the operating system.
Based on the BIOS string you provided there is an update to the BIOS for your motherboard. Download the .EXE version (4th download link) of the BIOS from the Intel download center here. You should be able to run this from your currently installed Windows XP OS and this will update the BIOS.
Regarding your question about hardware assisted virtualization technology, it's possible that in the version of the BIOS you currently have, virtualization technology wasn't an enabled feature in the BIOS. Updating the BIOS to the current version should provide an option in the BIOS to enable virtualization technology. Virtualization technology is generally located under a Device Configuration menu or Advanced menu and can be called VT, VT-x, or Virtualization Technology.
Hope this helps!
Many thanks for your prompt response - I've followed both your advice and the information you pointed me to and I now have an updated BIOS.
It has occurred to me that perhaps I should update other elements of my system - USB, graphic drivers etc.
Any thoughts - obviously related to Intel!
In most cases it is a good idea to keep the drivers of your system up to date. Generally, if you are using Windows Update to keep your Windows OS up to date, this will also update the motherboard drivers as well (Intel works with Microsoft to get the latest approved drivers added to their Windows Update service). However, you may find that some drivers will still need to be downloaded and installed from the Intel Support site.
One additional piece of information regarding your original question about enabling virtualization, the motherboard, BIOS, and processor all must support virtualization in order for the options to be available in the BIOS. The DG33 boards do support virtualization so long as an Intel Core processor is installed. The Intel Pentium and Celeron processors do not support virtualization. Just thought I would clarify in case after you updated your BIOS and still didn't see the options for virtualization.