I recently decided to jump ship and upgrade my developer machine from Vista to Windows 7 RC. I usually do a clean install, but resofting everything would take a whole day, so I tried upgrading and I was very pleased to see that everything is still working.
Windows 7 (Ultimate and professional) has something called XP mode or Virtual Windows XP which basically is a built-in virtual XP running in an integrated version of Virtual PC (you’ll need to download and insttall from Microsoft.com) . That’s nothing new, but what’s interesting is how the whole thing is integrated with Windows 7.
Microsoft uses a feature of RDP called remote applications. So when you run an application in Virtual XP you don’t see the whole XP desktop like you do when using normal Virtual PC or VMWare, you only see the application’s window, and it’s visible in Windows 7′s start menu, taskbar, ALT-TAB etc. It’s very similar to how things work on the Mac when running Windows apps.
As a developer I sometimes need to maintain old VB6 legacy code. VB6 does not run very well in Vista or Windows 7 and working in a Virtual PC has been the only option, same goes for testing web sites in IE 6. With Windows 7 and XP Mode I now have both VB 6 and IE 6 available directly from the Windows 7 start menu. Clicking any one of them will start the virtual xp machine if not already running, open the said application and transfer the application’s UI via RPD to Windows 7. It takes a few seconds the first time, but man how much better it’s to work with those old tools now.

Virtual Windows XP is a really nice add on, this feature makes it so much easier for many smaller firms to migrate to the next iteration of Windows.