>>>>http://www.microsoft.com/windows/virtual-pc/default.aspx
>>>
>>>I just read some of the MS propaganda on Virtual PC; sounds like maybe something I can use. But I was wondering if I could ask you a simple question, please. Do I understand correctly that, once you install Virtual PC, you start up you Win 7 as Win 7, then press some keys and Win XP is loaded (Win 7 is then not available). Then after working in Win XP you can press some keys and go back to Win 7 without XP? Is this pretty much how the UI of the Virtual PC works?
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>>Not quite. "XP Mode" in Windows 7 is a special version of Microsoft Virtual PC, designed to work with certain versions of Windows 7 (Pro and higher). You have to download 2 or 3 installation packages from Tracey's link to install the product - it does not come with Win7 by default, even with the higher versions.
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>>In normal operation, you start your computer and it's running Win7. After XP Mode has been installed, it appears as an item in your Start Menu. If you start XP Mode, you are in effect starting another computer (virtual machine [VM]) on the same hardware, one which is running XP SP3 (32-bit). By default this appears as a window running less than full screen, although you can switch to full screen in XP Mode if you wish.
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>>If you click on the XP Mode window, your mouse movements and keystrokes are applied to that VM. You treat it exactly as if it was another completely separate computer: you install your software on it, apply Windows updates etc.
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>>You can leave the XP Mode VM running, and click outside its window - now your Win7 host machine regains the focus. You can now do anything you want in Win7, while XP Mode is still running.
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>>Finally, when you're finished using XP Mode you can close it. By default, what actually happens behind the scenes is the XP Mode VM gets hibernated. But, you can completely shut it down if you'd rather do that instead.
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>>So, XP Mode is really the ability to start up a second computer running XP SP3, on-demand, on your same hardware, while simultaneously being able to fully access your main Win7 "host" computer.
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>>There are a few things to be wary of with XP Mode:
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>>- It uses significant RAM while it's running
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>>- Some devices are shared by default e.g. network connection, fixed hard disks in your computer. However, support for shared USB is uneven; you may need to manually "attach" or "release" USB devices in the XP Mode VM, which can be a PITA to remember
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>>- By default networking is set up in NAS mode, so the Win7 host and the XP Mode guest VM can both "see" the Internet, but they can't see each other. This can be changed, but it requires some forethought and planning, similar to what you'd do when setting up a network between 2 or more physical computers
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>>- Just like with a real computer, you have to remember to back up the XP Mode VM's files, apply Windows updates etc.
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>>Here is a ZD "hands-on" article: http://www.zdnet.com/blog/hardware/hands-on-windows-7-xp-mode/4294
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>>***********
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>>There are other options for running VMs. One that I use is the freely downloadable Sun VirtualBox ( http://www.virtualbox.org/ ). This is more capable than XP Mode, but there are some differences:
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>>- You need to supply a licensed copy of whatever OS you install in a VirtualBox VM. For example, if you installed VirtualBox rather than XP Mode, you'd have to supply your own licensed copy of XP SP3. With Win7 Pro or higher, you get that XP SP3 license for free
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>>- Although setting up a VM and installing an OS on it is quite easy in VirtualBox, it still takes a lot longer than setting up XP Mode directly on Win7
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>>- VirtualBox supports snapshots. I don't think XP mode does. Snapshots are terrific for testing
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>>- XP Mode is optimized so switching between the XP Mode VM and the host Win7 computer is as seamless as possible. By default VirtualBox is not as slick, although I believe there are "guest helper" additions you can install in VirtualBox to make it more seamless
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>>- With VirtualBox you can easily run multiple VMs simultaneously (if you have enough RAM). For example, you could have your host Win7, an XP guest, and a Ubuntu Linux guest all running simultaneously, all able to talk to each other over a virtual network. You have, in effect, a complete network in a single box.
>
>Thank you for a very detailed message. I installed exactly what Tracy suggested, downloaded Virtual PC and then Windows XP Mode (all from MS site). But I don't like it. It is slow and feels kind of kludgy. I am thinking of getting a Windows 7 32 version (unless it comes on Windows 7 64 bit version) and downgrade to 32 bit OS.

There are other options as well. However, all require a substantial amount of memory and processor speed to really work without feeling "sluggish" as you called it. I prefer separate laptops or pcs to really test in a simulated customer environment.