@RyanKing - Yes, dozens of people are successfully running Win7 32-bit PAE patched kernel with WinXP Intel HD Driver. It just requires a minor edit to igxp32.inf so that the driver says that it supports Win7.
The instructions are here:
PAE patch updated for Windows 7 SP1 | wj32
hxxp://wj32.org/wp/2011/02/23/pae-patch-updated-for-windows-7-sp1/
Scroll down to the 5th comment where it says: "Andy says: May 7, 2013 at 4:32 am" for complete instructions. You will find in the comments of that page dozens of people have reported success in running Win7 PAE-patch with WinXP IntelHD driver. Also, note that Wen Jia Liu (wj32) is the author of acclaimed tool "Process Hacker" and recognized expert in NT architecture and so his PAE patch should be considered quite credible and safe.