One of the coolest features of Windows 7 is “XP Mode”, a way to run a virtual Windows XP session in Windows 7.
At its most basic, XP Mode offers “Desktop Mode”, in which a virtual machine opens up and boots into its OS. This is nice, but it’s nothing extraordinary – in fact, users of Virtual PC 2007, VMWare Workstation and Sun’s VirtualBox will probably yawn and wonder what all the fuss is about. After all, it’s not much different than running any of those apps.
Where XP Mode really shines is “Seamless Mode”, in which shortcuts for applications installed on the virtual machine are added to the Windows 7 start menu. When you want to run one of those apps, you don’t have to start the virtual machine in desktop mode and wait for it to boot up – the application runs within a window under Windows 7. Aside from the “(Remote)” tag added to the title bar of the application, you’d have no idea it was even running virtually! Cool, huh? So you can now finally run Office 2007 and a virtualized Office 2003 on the same machine!
There are, however, a few drawbacks. First, you need a CPU that supports virtualization (support for Intel processors is patchy; while AMD supports it in all but their cheapest processors). You also need a copy of Windows & Professional, Enterprise or Ultimate to run XP Mode. More niggling concerns are that Seamless Mode apps can only be run on a primary monitor if you’re using a multi-monitor setup, and such apps also don’t work with Windows 7’s Snap feature (where you can resize windows by simply moving them around; Seamless Mode apps must be resized manually).
XP Mode has a couple of key advantages, too. Aside from the aforementioned Seamless Mode, Windows 7’s XP mode also offers full USB support and also includes a fully licensed copy of Windows XP SP3 (this is why the download is 473MB, by the way). So you don’t need an extra XP license to run XP Mode legally – that’s pretty awesome!