Windows XP Mode is a new feature for Windows 7 Professional and Windows 7 Ultimate that allow you to run multiple Windows environments, such as Windows XP Mode, from your Windows 7 desktop. Windows XP Mode for Windows 7 makes it easy to install and run many Windows XP productivity applications directly from your Windows 7-based PC. It utilizes the latest Microsoft virtualization technology, such as Windows Virtual PC, to provide a virtual Windows XP environment for Windows 7.
Windows XP Mode requires downloading and installing both Windows XP Mode and Windows Virtual PC. Windows Virtual PC provides a simple wizard to set up Windows XP Mode with just a few clicks.
Once you have installed Windows XP Mode, click the Windows 7 Start button, then select All Programs > Windows Virtual PC > Windows XP Mode to begin setup. You will be asked to create a new password and whether or not to receive Automatic Updates. Once the setup is complete, you will see your new Windows XP Mode environment as a window on your Windows 7 desktop.
It enables Windows XP virtual environment and Windows 7-based PC to share network connections, clipboard content, printers, USB devices, Smart Cards, and external storage. When working in Windows XP Mode, you can use the network connections of your Windows 7-based PC to access the Internet from your virtual machine.
Windows XP Mode for Windows 7 enables you to run your Windows XP applications directly from the Windows 7 desktop in what is called “Seamless Mode.” This means that once you’ve installed an application, it will also appear in your Windows 7 All Programs menu, along with all of your other Windows 7 applications.
USB storage devices, scanners, and Smart Cards whose drivers are installed on the Windows 7 host and the virtual machine are automatically shared with the virtual machine if the integration features are enabled. To attach or release the USB device from virtual machine, click on the device name once more in the drop-down USB menu.
You can install applications in Windows XP Mode just as you normally would on a physical PC. For example, you can install applications via web, from storage devices, or from physical media such as CD/DVD.
Clipboard is shared between physical and virtual machines, you can copy and paste any data you want between Windows XP applications and their counterparts in Windows 7. You can also access your Windows 7 folders such as My Documents, Pictures, Desktop, Music, and Video, from inside the virtual Windows environment, such as Windows XP Mode.
Download Windows XP Mode and Windows Virtual PC from here. For information on how to set up Windows Virtual PC and Windows XP Mode, check out “Running Windows XP Mode with Windows Virtual PC” on the Support and Videos page.