It seems like a lot of major corporations skipped the upgrade to Windows Vista. This was primarily due to the fact that a lot of their legacy apps did not play well with Vista. Microsoft has addressed this issue in Windows 7 by introducing XP Mode (XPM). XPM is a virtualization environment that will allow Windows 7 users to run legacy XP Apps with almost 100% compatibility. XPM is built on the next generation Virtual PC 7 product line, which requires processor-based virtualization on the underlying PC.

XP Mode requires a fully licensed copy of Windows XP SP3 which will be made available, for free, to users of Windows 7 Pro, Enterprise and Ultimate editions via a download from Microsoft's website. That's correct, you will not see a XP disk or license along with your Windows 7 Media, You will need to download them separately. XPM will not require you to run applications in a separate window or desktop like Virtual PC. Instead you will install applications inside the virtual XP environment. After installation you will end up with your standard start menu and desktop shortcuts to launch your applications.  When running the application the experience will be seamless and transparent, you will not even know that the application is being virtualized.

In conclusion, I think XPM will ease the pain for a lot of large corporations who want to upgrade but need to maintain compatibility with legacy applications. Of course, the only draw back is that you will have to make sure you have a processor equipped with hardware virtualization. This means big bucks for vendors like AMD and Intel. On a personal note, I will be upgrading my OS on the same day Windows 7 goes public. And this time I have some legitimate reasons to upgrade other than just wanting the latest eye candy.