Microsoft releases XP mode RC for Windows 7

Microsoft has released updated bits of Windows XP Mode for Windows 7.

XP Mode is a method to provide better compatibility in Windows 7, and to pull it off with as little trouble as possible. It's also dubbed XPM, or formerly Virtual XP. XPM is built on the next generation Microsoft Virtual PC 7 product line, which requires processor-based virtualization support (Intel and AMD) to be present and enabled on the underlying PC, much like Hyper-V, Microsoft's server-side virtualization platform.

XP Mode will bring a Virtual PC-based environment, as well as a fully licensed version of Windows XP SP3, free for all owners of Windows 7 Professional, Enterprise and Ultimate editions. XPM will provide 100% compatibility with Windows XP. So, for you IE6 users, you're in luck. XP Mode will integrate itself with the Windows 7 desktop, and so the older software will run just like a normal Windows 7 application. Essentially, this is two operating systems running under an updated desktop.

Microsoft has made the following changes from beta to RC:

You can now attach USB devices to Windows XP Mode applications directly from the Windows 7 task-bar. This means your USB devices, such as printers and flash drives, are available to applications running in Windows XP Mode, without the need to go into full screen mode.
You can now access Windows XP Mode applications with a "jump-list". Right click on the Windows XP Mode applications from the Windows 7 task bar to select and open most recently used files.
You now have the flexibility of customizing where Windows XP Mode differencing disk files are stored.
You can now disable drive sharing between Windows XP Mode and Windows 7 if you do not need that feature.
The initial setup now includes a new user tutorial about how to use Windows XP Mode.

Windows XP Mode RC requires RC or RTM version of Windows 7 Professional, Ultimate or Enterprise. It also requires additional 1 GB of RAM, 15 GB of available disk space, and processor capable of hardware virtualization with AMD-V or Intel VT turned on in the BIOS. XP Mode RC is available from the Microsoft Virtual PC site.