Windows 7 - Windows XP Mode problem running older games

Hello,
I am running Windows 7 Pro x64 and have been trying to run some old games in XP Mode. I keep getting error messages. "16 bit MS-DOS Subsystem, C:\WINDOWS\system32\cmd.exe, The video device failed to initialize for fullscreen mode." How can I fix or get around this error?

Here are just two of the many games I tried to run:

Lords of the Realm II
Caesar III

NM, I just found out that windows doesnt run 16bit games.

If they ran previously in Windows XP, shouldn't they run in XP mode? I'm about to purchase Windows 7 Pro for this very reason since I have some older games too that don't run in Windows 7 x64.

I'm guessing the 16-bit programs shouldn't be too demanding though, I don't know what kind of video drivers are supplied for XP mode.

Very basic. Console-based games and games not involving directx usually work fine (though not always), but anything requiring acceleration is basically going to be a no-go in an XP-Mode VM. It's for business programs and older apps, not really for games.

Windows 7 Doesnt actually have Dos. it has a command prompt similar, but only test based DOS programs run.

Not only that, but Windows can run 16-bit DOS programs - the limitation is a 64bit processor one. If you're running a 64bit processor in native mode, it cannot switch from Long mode (64bit native, 32bit and 16bit protected mode) to Legacy mode (32bit native, 16bit non-protected mode, basically the same as x86). Thus, if you run a native 64bit OS, and the 16bit app is not a protected mode 16bit app that is known to work (and the vast majority do not, usually only certain 16bit installers work), it won't run on a 64bit version of Windows.