XP Mode couldn't be simpler. It consists of Windows Virtual PC 7.0, a new version of Microsoft's client-based virtualization product line, and a fully licensed install of Windows XP with Service Pack 3 (SP3). (You can also install other OSes into the Windows Virtual PC 7.0 environment if you'd like.) As with today's versions of Virtual PC, you're free to load up the XP desktop in a window and run applications inside of the virtual environment. But XP Mode goes a step further by using MED-V technologies to allow installed applications inside of the virtualized XP to appear in the host OS, alongside native Windows 7 applications.

Gaining access to applications in this fashion is likewise simple. Newly installed applications will simply be published directly into the Windows 7 Start Menu, where they can be accessed like any other applications. Those that don't for some reason, or built-in applications like Internet Explorer 6, can be made to run under Windows 7 simply by copying a shortcut to that application to the All Users Start Menu under virtualized XP. Once you do so, shortcuts to those applications appear under Windows 7 too.