Ok here a short brief about windows XP mode in windows 7.
What is Windows XP mode (in Windows 7)?
It is a Virtual OS which you can run it on windows 7. Its is free and allow you to install games and software which incompatible with windows 7. Windows XP for me still the best OS, so it may be one of the step from Microsoft to make user upgrade to windows 7 with this utilities.
Can Your PC Run Windows XP Mode?
Windows XP mode is only limited to PC which the processor support the Virtualization technology. If your processor doesn't met the requirement you can't install this program.
How do i check?
You can check either your processor support virtualization technology or not by downloading Intel® Processor Identification Utility and also Microsoft® Hardware-Assisted Virtualization Detection Tool
You must install Windows Virtual PC first and then Windows XP Mode
After installing both programs you may need to restart, after all installation finish.
Click start - programs - select XP Mode and lets it run the configuration, your win xp mode is ready.