XP Mode is new feature of Windows 7 that will be available in the Release Candidate (it wasn’t in the beta) and I think it wil be a game changer.
It is a simple, yet quite brilliant, concept-using Virtual PC 7 as a base, it lets you run XP only applications inside Windows 7 🙂 You might think, “Well why not just use Virtual PC?”…the biggest problem with using Virtual PC, VMWare Workstation etc is that you have 2 separate desktop entities causing you to switch back and forth without much interoperability but that’s not an issue here. XP Mode lets you run the legacy applications actually inside Windows 7, this screenshot from Paul Thurrott’s Supersite for Windows shows IE 8 & IE 6 running alongside each other in Windows 7:
As a feature this really is a biggie. So many people, especially corporate, are still running on XP and the vast majority of them are doing so becuase of app compatability. For example, our CRM system doesn’t work with Vista so as much as I’d love to have that as my work OS I simply can’t…however that’s all changed now. I’ll be able to use Windows 7 with XP mode and, like Hannah Montana, have the best of both worlds 😉
From a licensing perspective, it’s worth noting that XP mode will only be available in Pro, Enterprise & Ultimate editions.
From a technical perspective, Windows 7 XP Mode requires processors with Hardware Assisted Virtualization. Not all CPU’s have this, so a list of those that do is here.
Cloudy with a chance of Licensing 
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