Well, in addition I should mention that the answer might depend on what you actually mean by "display foreign languages". Rest assured that there is no lack of functionality in Windows 7 in comparison to XP. In fact, I am not aware if the language packs that Brink mentioned actually exist in XP.
I would classify language-related tasks in three general groups:
1. You want to read a document, i.e. a web site or a text document, in a foreign language.
2. You want to create a document, i.e. a Word document or a text file, in a foreign language.
3. You want to customize your system in such a way that all system messages - balloon tips, help files, window titles, menus, etc. - are displayed in the language of your choice which would be different from the original language of the OS.
The first two tasks are easy: these days any browser can show web sites in foreign languages, Word and Acrobat would allow you to read and type in any language (there might be an issue with complicated Asian languages, such as Korean and Chinese, if that's your issue, then there are threads in the forums addressing this particular issue), and so on. This was easy in XP and this is still easy in 7. I do not believe that this functionality depends on which edition you have installed.
The third task is way more complicated. In fact, in XP one had to go through a lot of trouble in order to change the basic character map used for system messages. So if you wanted to switch between English and Danish, then perhaps it would be not so difficult, but a switch to Russian would be a major headache.
Now, in Windows 7 this third task can be accomplished by using Language Packs, but they seem to be available to Ultimate and Enterprise users. But I am not aware of such Packs for XP, so I don't think that you are missing those.
Hope this helps. Otherwise, please post a more specific description of what you are trying to do and we will help you with it.