Windows 7: How to install software on XP mode?

I don't understand the instructions on how to install software on XP mode. If I have an installer on my desktop or from a DVD, what should I do?

How does the file system work for XP mode? Where is its desktop and folders located in the C drive? I've never used a virtual OS before.

A virtual machine will have a file like WindowsXP.vhd on the local machine... But inside of the virtual machine, you will see a C drive just like you would any other computer. So, if you wanted to fully back up the virutal machine, you could simply turn off the virtual machine...then copy the WindowsXP.vhd file and if you blow up your VM..you just put the WindowsXP.vhd file back, reboot the VM and you are right back to where you were.

So, for installing software, you can put the CD in the host computer and connect the physical drive to the VM and install to the VM's C drive. In addition, if you have an ISO file, you can mount that ISO file to the VM as a drive and install right from the hard drive.

What instructions were you referring to?

The Windows Explorer in XPM looks like a normal Windows Explorer with mappings of your Host drives, CD/DVD ROMs etc. You install .exe, MSI and any installer like you do on the Host machine. Just locate it and double click.

Think of a virtual OS as what is it, a virtual emulation of the real thing. All files, themes, settings are stored on one file .vhd and when you start XPM this file is used to populate your OS.

Thanks!
Micosoft has 3 pretty good vidoes on this:
Intro to XP Mode.
How to install.
How to install apps.
http://www.microsoft.com/windows/vir...t/default.aspx

Don't watch any of the tutorials on Youtube. They're gawdawful, and you will only end up clawing your eyes out.