I have all my workspace and everything set up on Windows 7 but I also want to develop Windows Phone 8 but as stated on Microsoft website that It can not be installed on Wind
Here is a link from developer.nokia.com wiki pages, which explains how to install Windows Phone 8 SDK on a Virtual Machine with Working Emulator
And another link here
AFAIK, it is not possible to directly install WP8 SDK in Windows 7, because WP8 sdk is VS 2012 supported and also its emulator works on a Hyper-V (which is integrated into the Windows 8).