October 2009, Microsoft has released it’s final version of XP Mode. XP Mode is a virtualization application that can be used on Windows 7 Professional, Enterprise, and Ultimate. The technology allows legacy applications that ran on Windows XP to run in a virtualized environment. General public availability will be October 22nd, same day as the Windows 7 Launch, via the Microsoft website. This technology is aimed mostly at small to medium businesses.
Differences with XP mode and Microsoft Virtual Machine are as follows:
•Integration with XP Mode
•USB Support
•Seamless application publishing and launching
•Support for multi-threads
•Clipboard sharing
•Printer redirection
•Smart card redirection
•Drive Sharing
•Integration with Windows Explorer
•Known folder integration between host and guest
•Support for higher resolution
•Requires AMD-V or Intel-VT CPU features
Then the final best reason to use XP Mode instead of another virtualization client, is because you don’t need a product key for the XP virtual machine
