Well, out came the Windows 7 RC (build 7100) and XP is back to life from the ashes. The Release Candidate version superbly boasts about its virtualization technology by introducing the XP Mode in Windows 7 RC. [What is virtualization technology?]
According to Rivera, in order to use XP mode on Windows 7 requires processor-based virtualization support (in Intel and AMD processors) to be present and enabled on the PC. This feature is available free of cost as of now with the RC version. The final version of Windows 7 will not provide this feature out of the box. One will have to download it from the Microsoft website. Needless to say, now users can run applications in XP mode along with Windows 7.
A pretty smart move by Microsoft by introducing the aging Windows XP in a new avatar. They have seen the criticism when Vista rolled out. Vista never looked good against its predecessor even though it was. I think Microsoft is in a huge mission to wipe off Vista from its timeline by introducing the XP Mode in Windows 7.