I found out more about them:
(source: the book Windows 7 Secrets p.102-115)
1) Windows 7 offers both Windows Virtual PC and Windows XP Mode.
2) Windows Virtual PC and Windows XP Mode are two different things.
3) To install Windows XP Mode, Windows Virtual PC will need to be installed too.
4) Windows Virtual PC on Win 7 is a Virtual PC. We can install any guest operating system on it (supposedly)
5) Windows XP Mode is to run a Win XP app side by side with a Win 7 app. There is no guest operating system.
6) So again, Windows Virtual PC and Windows XP Mode are two different things.
7) Windows Virtual PC is provided in all versions of Win 7 (or most version, including Home Premium).
8) Windows XP Mode is only in Win 7 Professional, Enterprise, or Ultimate. It is not in Home Premium version.
9) To run Windows Virtual PC or XP Mode, the CPU needs to support hardware assisted virtualization. The BIOS needs to set to enable it too. If your CPU doesn't support it, you can always go back to the other virtual PC solution. VirtualBox is free, and so is VMWare's Player.
Isn't this the same as your previous question - http://superuser.com/questions/64396/why-windows-7-windows-xp-mode-is-needed-cant-i-just-run-the-virtual-pc-with-xp?
– ChrisF – 2009-11-02T13:30:44.587in that question, i thought the xp mode is the same as a virtual machine running xp... – nonopolarity – 2009-11-02T13:38:48.837
They are asking for different things, but are very border line being an exact duplicate – Josh Hunt – 2009-11-02T13:42:10.127
1I have merged the two questions since they weren't border line enough different to quantify two separate questions. However the answers on both was good. – BinaryMisfit – 2009-11-02T14:53:49.257