Merging (Using the Same) User Profile for both XP and 7

Question

I am currently dual-booting Windows XP and Windows 7. Each OS has its own user folders (\Documents and Settings\(All Users | Bob Bobson, etc.) in XP, and \ProgramData | \Users\Bob Bobson, etc. in 7). This becomes problematic since settings and such end up getting both duplicated and out of synch if you save or make a change while running in one or the other.

An obvious solution is to point the user’s folder in both OSes to the same directory somewhere. Further, one would probably want to do this for All Users as well, and possibly even for Default User and maybe even for NetworkService, LocalService, etc.

The question then becomes what issues may arise by doing so (other than having to merge existing and disparate data from both folders).

Obviously this is unlikely to be much of a problem for most software (games and simple apps) that store data for the user, but what about bigger apps like Office, Visual Studio, Photoshop, Maya, Windows Media Player, iTunes, and even Windows itself? In addition to actual documents and settings (duh), some programs also store a lot of extra junk, including installation-dependent content in there (stuff that often ostensibly doesn’t belong in there like help documents and such).

Windows itself stores a lot of extra stuff in the numerous Microsoft directories (ie, Application Data, Local Settings, AppData\Local, AppData\LocalLow, AppData\Roaming) such as credentials, certificates, et. al. Things like this could easily have hidden ramifications.

Worse, All Users, Default Users, the various service “users” and other virtual user accounts that programs like Visual Studio, eMule, and such create seem even more likely to cause problems.

Does anyone know the feasibility of combining user folders for XP and 7 and the potential problems (e.g., permissions) that could arise—and hopefully how to resolve or work around them?