hm, that error is quite seldom.
The only hint I found is the following:
If you get error code 0×89721800 when attempting to deploy to your phone device, this typically indicates that the Visual Studio datastore is corrupt. Here are a couple of workarounds:
1. Close all Visual Studio instances that may be currently running.
2. Delete the folder “%LOCALAPPDATA%\Microsoft\Phone Tools\CoreCon\10.0”
3. Launch a new instance of Visual Studio
The above error code has also been reported when Windows Mobile 5x or 6x emulators are installed in the system. Try uninstalling them both.
So I would give this a try, clean out all the folders under
LOCALAPPDATA%\Microsoft\Phone Tools\CoreCon and in case this would not help, then uninstall the SDKs and reinstall the latest one for WP 8!
Further the following link points to other (WP8) Emulator (XDE) Troubleshooting Tips
Please let us know if that helps you to get the 7.x / 8.0 emulator working on your dev PC.