Users enjoy the broad compatibility Windows has. Even 20 year old 16-bit DOS based applications still run on Windows 7. However, the flip side of this is that it has made Windows very hard to maintain for Microsoft and very hard for developers to use.
That is, targeting multiple version of Windows is very difficult. Bugs present in one version and not another meant different run-time behavior for the application. Add to that the complexity that earlier versions of Windows were also fundamentally different depending on which version of Internet Explorer was installed, even the kernel was touched, meant you add a significant number of operating systems to test and debug. Ultimately, the best solution for portable applications for Windows was to use some kind of layer between your application and the operating system, most notably Java. Sun, or whoever, does the heavy lifting and you target one platform.
If you're familiar with Microsoft however, there's one very interesting technology that you just know is the future. The future of compatibility that is. That technology is called MED-V. Yes, it's a stupid name but the technology is far from stupid. MED-V is based on Virtual PC but instead of running a different operating system with a different desktop it runs your applications side by side.
What is stupid however, other than the name of course, is that this technology is currently only for enterprise customers who have volume licensing. This is a very sad state of affair considering that this would allow for a much more streamlined user experience for people who only want the latest and greatest and much greater compatibility for those who do not. What I mean by that is that ever since Vista shipped, Windows is a considerably more modular operating system with the capability to turn various features on or off. The potential still isn't realized today but Windows 7 goes a step further by allowing various applications to be "turned off".
Now, with MED-V, you could go that extra step, on your brand spanking new machine, you could, say, no 32-bit application, so that entire part of the OS goes missing. No resources no nothing. It also means that even if you're running these compatibility modules, it doesn't mean they're running all the time or at the same time. Furthermore, since these are full virtual environments, they're actually a copy of the target OS that the legacy application was designed for. What's also very interesting is even if these are virtual environment, they're running on the bare metal which means you still have the full power of your actual machine unlike actually using a virtual box.
Well everyone who knows about MED-V knows it's the future, well, at least the technology if not the name. This technology would allow for Windows to grow at a faster pace and cut off deprecated APIs and SDKs without breaking compatibility with older applications.
Which brings me to today, Microsoft has unveiled Windows XP Mode (XPM) for Windows 7. This is the same technology that powers MED-V but what it means is that every copy of Windows 7 will ship with a fully licensed copy of Windows XP SP3 for compatibility mode. So if you're a large enterprise with poorly written line of business (LOB) applications, all of them really, you'll be able to depend on this Windows 7 module to run all those applications. If you just happen to not care about this and just consider it bloat, that's fine too, just turn it off. In fact, if you don't really care about any of this, XPM doesn't actually run unless you use something that needs it.
Reviews of pre-release versions of Windows 7 praise how lean it is compared to its predecessor. That you agree with that or not doesn't really matter, thanks to XPM and eventually the full MED-V, you'll be able to turn off huge, gigantic portions of the operating system and developers and users alike will be able to enjoy new versions of Windows that are free from binary compatibility with older applications but nonetheless offer full compatibility which will mean a much leaner, more secure operating system for all.