Windows XP Mode (XPM) is a feature of Windows 7 Release Candidate. XPM allows users to continue to run their older xp-compatible applications on Windows 7. This feature will make XP users to upgrade to Windows 7.  XPM was designed by Microsoft for small-business users but the beta will encourage many users which can be downloaded for free from Microsoft Virtual PC.

XPM gives a new, improved version of Microsoft Virtual PC to run a complete freely downloadable virtual copy of Windows XP that runs in a window with Windows XP desktop. Or using seemless mode, XPM allows you to install applications to the Virtual Windows XP as how you install on normal Windows XP machine. And you can run those applications from Windows 7 desktop just as if they were standard windows 7 applications. In the seemless mode you wont be seeing Windows XP desktop. Instead you just sees a window with XP based application. The Virtual Windows XP system runs invisibly in the background.

Files can be saved from applictions running seemless mode under XPM to the default documents folder under Windows7. In both XPM seemless mode and seperate XP desktop, you can use the Windows Clipboard to transfer text and images between Windows 7 and XP applications.

This post was originally reviewed by Edward Mendelson at PC Magazine Reviews.