For some time now, the Microsoft has been quietly building a "Windows XP mode" that uses virtualization to allow Windows 7 to easily run applications designed for Windows XP.
The XP mode won’t come in the box with Windows 7, but will be made available as a free download for those who buy the professional, enterprise, or "ultimate" versions of Windows 7. The site also has some screenshots of the mode in action.
Microsoft confirmed XP Mode in a blog posting.
"Windows XP Mode provides you with the flexibility to run many older productivity applications on a Windows 7 based PC." Microsoft said it "will be soon releasing the beta of Windows XP Mode and Windows Virtual PC for Windows 7 Professional and Windows 7 Ultimate."