Note: This article is adapted from a number of previous articles I've written about Windows XP Mode and Windows Virtual PC. --Paul
The more I learn about Microsoft's enterprise-oriented virtualization solutions--especially Microsoft Desktop Optimization Pack (MDOP) tools like App-V (Application Virtualization) and MED-V (Microsoft Enterprise Desktop Virtualization)--the more I become convinced that the technologies they employ could form the basis of the future of Microsoft's legacy application compatibility efforts. After all, why bother tying down new Windows versions with legacy deadwood when you can seamlessly and effortlessly run older Windows applications inside of a hidden virtualized environment? To the user, these applications are simply what they need to get their job done, and they run side-by-side with modern, native Windows applications that are installed locally. To the administrator, these virtual applications are highly manageable, and can be deployed only where needed. Clearly, these tools are a hint, a pointer, of what's to come.
That future can be seen, too, on the Windows 7 desktop, where Microsoft has provided an unmanaged version of its MED-V solution called Windows Virtual PC. This Windows feature ships separately from the core OS for antitrust reasons and is made available for free to customers of all Windows 7 versions. A related Windows 7 feature, Windows XP Mode, provides a free licensed version of Windows XP Professional with Service Pack 3 (SP3) that you can run in the Windows Virtual PC environment. This perk is provided only to Windows 7 Professional, Enterprise, and Ultimate owners.
If you're familiar with MED-V, you can think of Windows Virtual PC as MED-V Lite. But where MED-V is aimed at large companies and requires a volume license agreement with Microsoft, Windows Virtual PC is aimed at small and medium businesses that skipped over Windows Vista because that operating system wasn't compatible the legacy or custom applications they're still running on Windows XP. (There are other reasons why customers have skipped over Vista, of course, and Microsoft addresses those concerns--like performance--elsewhere in Windows 7.)
Windows Virtual PC is essentially the next version of Windows Virtual PC 7.0, the latest rendition of Microsoft's client-based virtualization product line. XP Mode, meanwhile, provides a fully licensed install of Windows XP with Service Pack 3 (SP3). (You can also install other OSes into the Windows Virtual PC environment if you'd like.) As with previous 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 are simply 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.
The combination of Windows Virtual PC and XP Mode is exciting on a number of levels. As with MED-V, it erases the complexity of managing two desktops, each with its own set of applications. Instead, virtualized XP applications simply run side-by-side with natively installed applications, access the Windows 7 file system and printers seamlessly, and otherwise work exactly like Windows 7 applications. This means that users can simply get to work and not worry about what's going on under the covers.
Sure, you could run an entire virtual environment in a window, but Windows Virtual PC is really about exposing virtualized applications, and allowing them to run side-by-side with native Windows 7 applications.
Windows Virtual PC is available in both 32-bit and 64-bit versions, so you'll need to version that is correct for your OS. However, you can only run 32-bit virtual machines inside of Windows Virtual PC, as was the case with the previous version of this product, Virtual PC 2007.
Compared to its predecessors, a number of things have changed in Windows Virtual PC. First, the integration components now support XP with SP3, Vista with SP1, and Windows 7, so you're free to install these other OSes in VMs if you'd like. As per previous Virtual PC versions, you get seamless mouse movement between the host and VMs, can access a combined host/VM clipboard, access physical drives and printers on the host from within VMs, and, in a new twist, some USB devices. (This was a notable missing feature in Virtual PC.) Microsoft says that USB-based printers, storage devices and smart card readers are now automatically shared with virtual machines. You can also redirect other USB devices to VMs via the new USB menu in the VM window; each attached USB device on the host is listed.
It's possible to manage USB devices that are shared between the host (Windows 7) and guest (XP) OS.
Tip: The ability to access USB devices from the virtual environment raises an interesting possibility: Perhaps XP Mode could be used for hardware compatibility as well as software compatibility. That is, if you have a USB-based device that works in Windows XP, but not in Windows 7, would it be possible to install that device under XP Mode and then share it out to Windows 7? I've not personally tried this, but several readers tell me they've done this successfully with printers and scanners.
XP Mode applications are also available via native Windows 7 jump lists, so you can access your most recently-used virtualized applications via right-click.
You can access individual virtualized applications from the Windows Virtual PC jump list.
And finally, you can customize where Windows XP Mode differencing disk files are stored, and disable drive sharing between Windows XP Mode and the host Windows 7 environment if that feature is not needed.