One of the major challenges with moving to a new OS is dealing with older applications. This was an issue with the release of Windows Vista and in order to mitigate that with Windows 7, Microsoft has released a feature called XP Mode, which runs a Windows XP SP3 virtual machine in the background that can be used to run legacy applications. What is really interesting is that as a user, you only see a shortcut on the desktop or start menu and interact with the application as you would any other application. Launch an application and the VM wakes up (by default it hibernates when not in use) and presents the application, close the app and the VM hibernates!
There are two components that need to be installed, Windows Virtual PC which is the successor to Virtual PC 2007, and the XP Mode VM. Once they are installed there is a simple set up process to turn on Automatic Updates, set a username and password for the XP VM and you are on your way. The VM can be joined to AD and act as any other domain member.
There are the typical Virtual PC settings such as memory, disk, networking etc… but the addition of Auto Publish allows applications that reside in the XP VM to appear in the Windows 7 start menu.
So to the end user they access the applications just like any other.
Any application that is installed in the XP VM can be published simply by dropping the shortcut to launch it in All Users –> Start Menu As an example I placed the IE6 shortcut in All Users\Start Menu and launched it on Windows 7 next to IE8.
You can also mount any USB device in the XP VM as Windows Virtual PC now supports USB devices!
If you are looking to use this to solve an enterprise wide app compat issue you can use this same technology with the addition of a management suite with MED-V, or Microsoft Enterprise Desktop Virtualization, which is currently in beta (as is XP Mode and Windows 7 at the time of this writing) or the Application Compatibility Toolkit which we wrote about previously.
For more information see:
Microsoft Enterprise Desktop Virtualization
Download MED-V Beta 1
Microsoft Springboard Portal