If you want to install it in a separate partition and dual boot, then yes, it should be possible. It is possible to install a 32-bit OS on a system with a x64 processor, but not the other way around.
Also, if you had Win7 Pro or Ultimate you could install XP mode, which basically runs a copy of Windows Virtual PC, and it would run a copy of Windows XP Pro SP2, 32 bit.
- Mike