For example, alert icons for Windows XP's Security Center appear in the tray notification area of Windows 7, a behavior that, frankly, can be quite disconcerting until you learn to differentiate them from Windows 7's own notifications. (Hint: The newer Windows no longer uses colored icons.) But the bleeding doesn't stop there. Any applications that you install into the Windows XP VM, and that register their application shortcuts to the Start Menu's All Users group, will be "automagically" exposed through the Windows 7 host PC's local Start menu. Click one of these exposed shortcuts and Windows Virtual PC 7 launches the application from inside the Windows XP VM, rendering just that application's UI in a kind of seamless window on the Windows 7 desktop.
Of course, if you've worked with Parallels' Coherence mode or VMware's Unity mechanism, you've already seen this sort of dynamic screen-scraping technology in action. Microsoft is simply playing catch-up, using the ever-expanding feature set of its venerable RDP client to cut a few corners along the way. (The aforementioned seamless application publishing mechanism was introduced with RDP 6.0.)
Local but remote
Unfortunately, Windows Virtual PC 7's reliance on this very same RDP engine ultimately undermines the XP mode user experience. RDP is optimized for remote computing. As such, Windows Virtual PC 7 lacks the host-to-VM integration features, including drag-and-drop support, that make VMware, Parallels, and even its immediate predecessor, Virtual PC 2007, so easy to work with. RDP is also a bit sluggish when rendering virtualized applications. There's a great deal of shearing and other on-screen artifacts as you move, resize, and interact with Windows XP applications running in seamless mode, and none of the new Windows 7 Aero effects (snap, shake, thumbnail previews) work with these applications. All of this is fine if you're dealing with a remote Terminal Services session. However, it quickly becomes distracting when you're trying to switch between a mixture of native Windows 7 and virtualized Window XP applications.
Then there is the issue of application performance. Microsoft has made a point of emphasizing the new, multithreaded architecture of Windows Virtual PC 7 and how it improves VM throughput. However, my preliminary tests (Virtual PC 7 is still beta) using OfficeBench show that applications run a full 30 percent slower under Virtual Windows XP than they do under Windows XP installed natively on the same hardware. All of which means that, if you were hoping to upgrade to Windows 7 and use Windows XP mode to run your legacy applications at full speed and with complete fidelity, you're in for a disappointment. (See my blog for more on XP mode's glitches and annoyances.)
In fact, Windows XP mode is more evolutionary than revolutionary. It takes a pair of previously unrelated Microsoft technologies (Virtual PC, RDP) and stitches them together to make a quasi-workable compatibility box for those rare programs that don't execute reliably under Windows 7's native runtime. In my opinion, Microsoft would have done better by enhancing and extending its application virtualization platform, App-V. But that's a discussion for another forum.
Overall, the XP mode end-user experience is uneven, with plenty of opportunities for novices to get confused as they navigate between physical and virtual applications and resources. Add to this the support requirements of maintaining two completely disparate OS images per system, and XP mode may be more trouble than it's worth.
Still, there's something alluring about getting a free, licensed copy of Windows XP on which to run your troublesome legacy apps. Kudos to Microsoft for at least trying to address the legacy compatibility issue, even if the resulting solution is at best a kind of inelegant kludge.