Microsoft plans to release a new feature called Windows XP Mode for users of its business versions of Windows 7 that will include a fully licensed copy of Windows XP SP3 running in a virtual machine.
Windows XP Mode is specifically designed to help small businesses move to Windows 7. Windows XP Mode provides you with the flexibility to run many older productivity applications on a Windows 7 based PC.
All you need to do is to install suitable applications directly in Windows XP Mode which is a virtual Windows XP environment running under Windows Virtual PC. The applications will be published to the Windows 7 desktop and then you can run them directly from Windows 7.
Windows XP Mode and Windows Virtual PC are best experienced on your new Windows 7 PC. Microsoft will be soon releasing the beta of Windows XP Mode and Windows Virtual PC for Windows 7 Professional and Windows 7 Ultimate.
It will be made available, for free, to users of Windows 7 Professional, Enterprise, and Ultimate editions via a download from the Microsoft web site.
More on The Windows Blog.