In October Microsoft launched a new product called Windows XP Mode to help its customers to migrate to Windows 7 more easily.
Windows XP Mode is a preconfigured and fully patched copy of Windows XP Professional with Service Pack 3 that can be downloaded and executed inside the Virtual PC copy that comes with Windows 7 Professional, Enterprise and Ultimate editions.
This new version of Virtual PC sports the seamless window capability, allowing to run XP and 7 applications side by side without caring too much about which one is virtualized.
Unfortunately it requires a CPU which has the Intel VT-x extension enabled so not every Microsoft customer can use it. For example the ones that own a Sony VAIO can’t.
A new startup called VMLite is trying to address this issue, allowing Microsoft customers to run the Windows XP Mode VM inside a customized version of the Sun (soon to be Oracle) VirtualBox Open Source Edition (OSE).
This approach avoids the need for Intel VT-x and brings in additional advantages. VirtualBox in fact permits to go beyond several limitations of Windows 7 Virtual PC, like virtual disks bigger than 127GB, more than one vCPU, support for additional VMs that run 64bit guest OSes, and support for 2D/3D applications that require 32bit color and acceleration.
There are shortcomings too: at the moment VMLite can’t offer the USB support that Virtual PC has, and the UI integration with Windows 7 is not comparable yet.
virtualization.info double-checked with Microsoft and it seems that VMLite doesn’t infringe any term of the Windows 7 EULA.
At the moment the company is offering this product free of charge. It’s not clear how they will plan to monetize. It seems that the strategy is to build on top of VirtualBox OSE so that the product can compete against well-known products from VMware and Parallels.