Microsoft has announced a new Windows XP Mode for Windows 7 that allows legacy apps to run on Windows 7 using virtualization. The mode will be offered free of charge and is based on a virtualized version of XP SP3.
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ITProPortal reports that the OS needs to have security patches installed since it runs as its own OS even when virtualized. The XP Mode will only operate on Windows 7 Pro and Ultimate versions and will require a virtualization engine.
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All AMD processors except Sempron products will work with virtualization features. A file will be needed to determine if Intel parts are virtualization capable. Virtualization also requires 1GB of additional RAM and 15GB of hard drive space.