This is a GREAT feature if it works properly
I have some old legacy hardware that ONLY works on XP - Not possible to get Drivers
etc for this -- Manufacturer in some cases no longer exists and in others says model is either "Obsolete" or "Replaced by a Newer more featured (which I DON'T NEED) model).
This hardware is perfectly serviceable and will function for MANY years yet - for example
Old HP Plotter, professional 35 MM negative film scanner (the EXPENSIVE, non consumer grade sort - almost like a "Drum Scanner" - to shooters on the Forum). TASCAM minidisc studio pro recorder etc.
I've been using a combination of booting into XP natively (and more recently using an XP Virtual machine with VMWARE).
The idea of having this run "Natively" on Windows 7 will immediately be of HUGE HUGE interests to a VERY significant section of the market -- a lot of whom use very high end (non consumer gear) whist not being "very computer literate" and aree still likely to be using XP or even Windows 2000 on their machines.
Well done Microsoft.
Linux has had a similar type of capability for a long while (called "XEN") but somehow to get this to work properly is a job for a Computer Scientist PH.D and even then it doesn't really work for Windows products very well.
Looks finally if Microsoft has deceided -- Well if we can't wean people off XP we can at least get them on board with Windows 7 without having to use 3rd party products.
Note - there's still a real use for Virtual machines in development and testing so don't sell your shares in VMWARE just yet.