I have a successfully deployed application using the 3-tiers running as an out-of-browser (desktop app) on XP. Initially I was going to do the 2-tier deployment, but I was unable to get a workaround to work.
So I have one server, which runs IIS as well as my SQL server (OS is Windows Server 2003, but doesn't have to be.) The client machines range from Windows XP to Windows 7, and I haven't had any special problems with windows XP.
So I can definitely say XP will work as a client. I was unable to get it to run the middle tier (hence IIS on the server) but I didn't try every last idea I found, so I won't say it's impossible.
The two links I found most helpful in the process were http://blogs.msdn.com/b/bethmassi/archive/2011/03/23/deployment-guide-how-to-configure-a-web-server-to-host-lightswitch-applications.aspx and http://blogs.msdn.com/b/bethmassi/archive/2012/03/29/lightswitch-iis-deployment-enhancements-in-visual-studio-11.aspx
Hope that helps.