I've gotten a lot of questions about whether XP Mode will be suitable for gaming.

Put simply, no, it will not be suitable for gaming.

First, this technology is aimed at businesses, not consumers. It's licensed only for Windows 7 Pro, Enterprise, and Ultimate. What Microsoft is trying to accomplish here is to remove the final deployment blockers for its most recent version of Windows. Those are compatibility related. Many businesses run older applications or, more important, custom apps that they built on older Windows versions.

Second, it's based on Virtual PC vNext (7.0) not Hyper-V, and the performance you get is similar to what you see in VPC today. That is, it's fine for applications, not so good for anything strenuous.

As a caveat, I suppose that older, DOS-style games that run on XP (DOOM or whatever) might run fine under this environment, but I haven't tried that yet. And let's face it, you can always use DOSBox or whatever for that stuff.

BTW: Fun XP Mode fact: XP Mode application windows running under Windows 7 cannot take advantage of things like Aero Snap.