This is great news for people that do not have Hardware Assisted Virtualization (HAV) available in their machines.  When we released XP Mode, we said that it required HAV, we’ve now released an update that provides XP Mode functionality on non-HAV ready machines.  If you’re wondering, why didn’t we do this from the beginning?  We'll this update isn’t without a price.  If you don’t have HAV, everything will work with the possible exception of copy and paste between XP Mode and Windows 7.  Here’s the actual notice on the functionality:

Known issue
After you install this update, you may be unable to copy and paste files between Windows 7 and Windows XP Mode (or any other virtual machine). To work around this problem, copy and paste through the shared Windows 7 drives that you can access from the virtual machine. To do this, follow these steps:

This reads to me like it may work, but I haven’t tested it yet.  I’ll update you if I get more detail, but if you don’t have an HAV ready machine, you can get now get XP Mode functionality. 

The other price in this change will be a bit of a performance impact on non-HAV machines.  The lack of HAV requires some additional code to overcome that lack of functionality included in the CPU.  Yes, the older version of Virtual PC included that “code”, but the HAV functionality in the CPU improved performance.  I expect that while XP Mode will now “work”, performance on a non-HAV machine may be a bit “slower”.  How much “slower”, I’m not sure, but I suspect that most people probably won’t “see” the difference.

Please check out our knowledge base article 977206, it will give you all of the details and the download location for the update.. 

The actual actual press release is here.  That note that Windows Virtual PC must be installed before installing this update. 

Until next time,

Rob