If you have tried to use XP Mode in Windows 7 in the past, then you may have seen the below error message:
This error was caused because the machine in question is trying to start a virtual computer using Virtual PC, on a computer that has a CPU that does not support hardware-based virtualisation. So, something that might be good news to the people experiencing this issue is that Virtual PC for Windows 7 no longer requires a CPU with hardware virtualisation. This means that XP Mode is now available to many more people 🙂
I've had discussions several times with clients when we have talked about Windows 7 deployments and one thing that has always been an annoyance to them has been this requirement to be able to use XP Mode. Now, you can install a simple update to Windows 7 in order to unblock this restriction in Virtual PC and use XP Mode.
You can get the update here: http://support.microsoft.com/kb/977206