Microsoft Corp. will unveil an add-on to Windows 7 that lets users run applications designed for Windows XP in a virtual machine, the company confirmed Friday — the first time Microsoft has relied on virtualization to provide backward compatibility.

Dubbed “Windows XP Mode,” the add-on creates an XP virtual environment running under Virtual PC, Microsoft’s client virtualization technology, within Windows 7, said Scott Woodgate, the director of Windows enterprise and virtualization strategy.

Apparently Windows 7 will be business-ready. Worried about print drivers? Don’t worry- Windows 7 will be compatible with anything from XP. The key here is finding out how much of our system’s resources will be dedicated to running this in-the-background virtual machine. This sounds like a very good solution if it doesn’t jack up your RAM and CPU usage.

Windows 7 gets virtual ‘XP mode’ | ITworld.