The following is a Plus Edition article written by and copyright by Dick Eastman.
Windows 7 is perhaps the best operating system ever released by Microsoft. It features better security than ever before, better performance (under most conditions), better hardware compatibility, and a reduction in the number of obnoxious pop-up messages. However, nothing is ever perfect. In the process of adding so many improvements, Windows 7 also lost a few things. Most noticeable is the ability to run some older Windows programs under the latest operating system.
To be sure, most older Windows programs will work well under Windows 7. However, there are a few exceptions. Microsoft maintains a list of programs known to work properly in the Windows 7 Compatibility Center at http://www.microsoft.com/windows/compatibility/windows-7/en-us/default.aspx.
What can you do to use older programs that are not well-behaved under Windows 7? For a while, the best solution seemed to be to keep an older computer available as a second system, one that is running Windows XP. That older system could be used for programs that have difficulties with Windows 7; however, an older computer is probably prone to many risks that users will not be happy with. Luckily, there are better solutions.
Some versions of Windows 7 include all the required software at no extra charge. XP Mode is a free add-on for Windows 7 Professional, Ultimate, and Enterprise editions that includes a free and fully functional version of XP Professional SP3 that runs entirely inside Windows 7. If you have Windows 7 Professional, Ultimate, or Enterprise edition, you simply need to enable XP Mode and run it. Load all your older programs into XP Mode, and everything should operate in exactly the same manner as they did under Windows XP. In fact, they are once again running under Windows XP which, in turn, is running under Windows 7.
Windows 7's XP Mode runs within a virtual PC (VPC). This is not a dual-boot setup, which restricts you to running only one operating system at a time. Instead, a VPC lets you run a second operating system within your current operating system, giving you access to both simultaneously. If you already have Windows 7 Professional, Ultimate, or Enterprise edition, you can find dozens of web sites that will provide step-by-step instructions on how to enable and use XP Mode. You might start at http://goo.gl/uhvl5.
Unfortunately, Windows 7 Professional, Ultimate, and Enterprise editions are used mostly in corporations with large networks. Most home users will have the cheaper Windows 7 Home Premium or Starter editions. These two cheaper versions do not include XP Mode, and therefore, these are the two versions that seem to have the most problems running older Windows programs.
Of course, you could always upgrade to Windows 7 Professional, Ultimate, or Enterprise edition. However, that costs money. If you are willing to invest a bit of effort to make it operational, there is another solution that may be cheaper.
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