Windows 7, also known in nerdier circles as the best thing since canned bread, has been announced as containing a virtualised Windows XP install known as XPM.
This isn't available on all versions of W7 however; only the Professional, Enterprise and Ultimate versions will be granted access to it as detailed on the Windows Supersite.
It's an almost-seamless use of the old OS too, downloaded as an entirely free and liscensed copy through Microsoft's website for any of the aforementioned versions of Windows 7, but like most things there are some significant drawbacks.
The main one, that is being mentioned in websites across the net, is the requirement for Virtualisation inside the CPU itself (check out both Intel and AMD virtualizing tech for more), and along with that brings a heightened requirement for hardware specs - suggesting a minimum of 2GB to use it.
While XPM mode will allow installation of old programs, as well as integration into Windows 7's start menu, there are a few out there who believe this is a very dodgy move by Microsoft, such as Charlie Demerjian from TheInquirer.
He's released a very large opinion-based piece on the issue, in which he says will leave computers open to viruses as well as causing unreasonable demands on hardware:
To make matters funnier, all those virtual devices will take their toll on speed, so it won't run fast at all without very modern hardware. Add in the fact that you will need all of the resources to run Windows 7 PLUS all of the resources you need to run Windows XP. From what we hear, Microsoft recommends 2GB of memory for Windows 7, but then again, it also said you could run Vista in 512MB. Har har. Upgrading to Windows 7 on older hardware promises to be a very poor choice.
So, what you will get with XPM is not an XP machine but a bloated resource hog that emulates the worst of 2004. Slowly. It may be a good fit for green screen COBOL apps that won't run on the Broken OS, but that is about it, and you will pay for the 'privilege' in terms of resources used and speed of operation.
Both the released news and TheInquirer story are worth a read, but ultimately it will be left to the official public release candidate of Windows 7 before any of these features will definitely be a problem.