Running Snow Leopard on Mountain Lion host VM (and being able to develop apps)

I am a MacBook Pro owner and a game developer who wants to port his previous games for iOS.
My Mac came with Mountain Lion. The game engine that we used can't be compiled with Mountain Lion (it uses Allegro 4 library, which uses libraries deprecated by newer Mac OSX versions). I don't think it will take a short time for our game engine to be compatible with Allegro 5, so working in Snow Lion seems to be our solution in this case.
I have read that you can't install Snow Leopard to new Mac, replacing the main OS. But I know that it's possible to install it in virtual machine, hosted by Mountain Lion. My questions are,
* Can it be upgraded to the latest Snow Leopard? I have read that some guy tried it with his pirate copy of SL and he bricked his virtual machine. I won't suffer the same fate because I will have purchased SL, right?
* Will I be able to use XCode 3.2.6 AND submit my iOS game from virtual machine?
It would be great if I could use Snow Leopard without buying a new (actually, old) Mac. I already feel like being punished just because we aren't at the year when Snow Leopard was the current OS.
Thank you very much,
Ahmet "Gord10" Kamil Keles

Additional information and links.
Parallels
VirtualBox
VM Fusion
Snow Leopard server for use with the above. Call 1-800-692-7753 and order part number MC588Z/A. Cost is $19.99 + sales tax and shipping.

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