There is going to be an XP mode in Microsoft’s next operating system according to various websites. The XP mode will only be available to Professional, Enterprise, and Ultimate editions of Windows 7.

The way the it works is that XP will run under a virtual processor and applications designed for Windows XP can run without booting a virtual machine.

The article at CrunchGear notes that the applications that users installed under XP will show up in the Windows 7 start menu.

Two screenshots are included in CrunchGear. The first is about the Windows Virtual PC. The other one shows the start menu which shows the XP applications that are installed.

Source: CrunchGear