I have Win7 64bit OS, and I'm trying to get started with cracking software.
There seems to be a vibe that a 64bit operating system may interfere with some of the cracking tools like debuggers, is this true?
Do I need to set up a 32bit OS like WinXP on a dual boot config, or will using 32bit OS in a virtual machine (running on 64bit OS) work fine?
I'm trying to keep things as simple and easy as possible while learning.

Good idea. During the 32 to 64 transition, you can, for the mostpart, do the reversing in 32 and the work the program, with little or no change on a 64 bit system