Solved Adding a partition

May still be a long shot but....

W7x32 supports the 16 bit subsystem while W7x64 does not.
I believe the same constraint applies to native XP.
Therefore I suspect W7x64 running xp mode won't support a program requiring the 16 bit subsystem while W7x32 running xp mode would support the 16 bit subsystem.

I think you have cracked it, many thanks.
 

My Computer

Computer Manufacturer/Model Number
Home made
OS
Win7 Ultimate 64bit
CPU
AMD Phenom (tm) 945oe Quad Core 2.10 GHz
Motherboard
Sapphire PE-AM2RS740G2 - PURE Element 740G
Memory
2gb
Graphics Card(s)
onboard
Sound Card
onboard
Monitor(s) Displays
Technika 26"
Hard Drives
Sata 500gb onboard
Several USB external HD
PSU
600watt
Case
Pass
Cooling
four fans
Internet Speed
sluggish
As far as I know, Windows XP Mode is always a 32bit XP Professional both in W7x64 and W7x32...
 

My Computer

Computer Manufacturer/Model Number
Custom Build
OS
Windows 7 Ultimate x64 SP1 clean install
CPU
AMD Athlon 64 X2 6400+
Motherboard
Asus M2N-E SLI
Memory
4 GB
Graphics Card(s)
2 x NVidia Geforce 8600 GTS
Sound Card
Trust 5.1 Surround USB
Monitor(s) Displays
Benq FP931 19"
Screen Resolution
1280x1024@32bit@75MHz
Hard Drives
1 x Western Digital 500GB SATA (OS installation), 2 x Seagate 320GB SATA, 1 x Seagate 250GB IDE (in external USB box), 1 x TrekStor 750GB USB
PSU
650W
Keyboard
Logitech Cordless Desktop EX 100
Mouse
Logitech Cordless Optical
Internet Speed
8192 kbps / 640 kbps
As far as I know, Windows XP Mode is always a 32bit XP Professional both in W7x64 and W7x32...
I think the 16 bit subsystem is part of the the underlying OS that the XP mode emulation is running on. I stand to be corrected on this one though.
 

My Computer

Computer type
PC/Desktop
Computer Manufacturer/Model Number
Own build
OS
Windows 7x64 Home Premium SP1
CPU
Intel i7 2600k
Motherboard
ASUS P8Z68 Deluxe
Memory
G.Skill Ripjaws (DDR3-1600) 2x4GB
Graphics Card(s)
Nvidia GeForce GTS 450; Intel HD Graphics 3000(GT2+)
Monitor(s) Displays
Dell Ultrasharp IPS panel U2311H, Samsung SyncMaster P2350
Screen Resolution
1920x1080
Hard Drives
Samsung 850 Pro SSD 256GB, Samsung SSD 840 120GB, Seagates 1TB Barracuda ST31000528AS x2
PSU
Seasonic M12II 520W
Case
Lian Li Lancool PC-K60
Cooling
Case: 1x120mm, 3x140mm CPU: Hyper 212+
Keyboard
Logitech MK520 (wireless)
Mouse
Logitech MK520
Internet Speed
6-7 Mbps
Antivirus
Norton Security Premium, Malwarebytes on 2 (MSE on 3rd PC)
Browser
FireFox
Other Info
Audio: Logitech Z523 2.1
As far as I know, Windows XP Mode is always a 32bit XP Professional both in W7x64 and W7x32...
I think the 16 bit subsystem is part of the the underlying OS that the XP mode emulation is running on. I stand to be corrected on this one though.
XP mode is a Windows XP Professional 32-bit. So, XP mode owns its 16 bit subsystem.
Using Windows Virtual PC to run 16-bit applications on 64-bit Windows - Virtual PC Guy's Blog - Site Home - MSDN Blogs
 

My Computer

Computer Manufacturer/Model Number
Custom Build
OS
Windows 7 Ultimate x64 SP1 clean install
CPU
AMD Athlon 64 X2 6400+
Motherboard
Asus M2N-E SLI
Memory
4 GB
Graphics Card(s)
2 x NVidia Geforce 8600 GTS
Sound Card
Trust 5.1 Surround USB
Monitor(s) Displays
Benq FP931 19"
Screen Resolution
1280x1024@32bit@75MHz
Hard Drives
1 x Western Digital 500GB SATA (OS installation), 2 x Seagate 320GB SATA, 1 x Seagate 250GB IDE (in external USB box), 1 x TrekStor 750GB USB
PSU
650W
Keyboard
Logitech Cordless Desktop EX 100
Mouse
Logitech Cordless Optical
Internet Speed
8192 kbps / 640 kbps
As far as I know, Windows XP Mode is always a 32bit XP Professional both in W7x64 and W7x32...
I think the 16 bit subsystem is part of the the underlying OS that the XP mode emulation is running on. I stand to be corrected on this one though.
XP mode is a Windows XP Professional 32-bit. So, XP mode owns its 16 bit subsystem.
Using Windows Virtual PC to run 16-bit applications on 64-bit Windows - Virtual PC Guy's Blog - Site Home - MSDN Blogs
This doesn't prove to me that XP mode under Windows x64 owns its 16 bit subsystem. It says you can get success with some 16 bit apps by running virtual PC.
Likewise VMware can be successful with some 16 bit apps- see here
Is Windows 7 able to run 16 bit installers under XP mode? - Microsoft Answers
So it suggests to me that it is Virtual PC or VMware that is providing the subsystem capability.

XP mode alone under Wx64 won't run many peoples 16 bit apps whereas Wx32 will. The OP himself has this experience as do others.

So OP you may want to try Virtual PC or VMware.
I'm reporting what I read, Virtualization experts (and I'm not one of them) may want to chip in.

Unless the software is not supported anymore upgrading avoids these problems and is bound to give you better performance.
 

My Computer

Computer type
PC/Desktop
Computer Manufacturer/Model Number
Own build
OS
Windows 7x64 Home Premium SP1
CPU
Intel i7 2600k
Motherboard
ASUS P8Z68 Deluxe
Memory
G.Skill Ripjaws (DDR3-1600) 2x4GB
Graphics Card(s)
Nvidia GeForce GTS 450; Intel HD Graphics 3000(GT2+)
Monitor(s) Displays
Dell Ultrasharp IPS panel U2311H, Samsung SyncMaster P2350
Screen Resolution
1920x1080
Hard Drives
Samsung 850 Pro SSD 256GB, Samsung SSD 840 120GB, Seagates 1TB Barracuda ST31000528AS x2
PSU
Seasonic M12II 520W
Case
Lian Li Lancool PC-K60
Cooling
Case: 1x120mm, 3x140mm CPU: Hyper 212+
Keyboard
Logitech MK520 (wireless)
Mouse
Logitech MK520
Internet Speed
6-7 Mbps
Antivirus
Norton Security Premium, Malwarebytes on 2 (MSE on 3rd PC)
Browser
FireFox
Other Info
Audio: Logitech Z523 2.1
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