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Yes it is free to the user provided that it is not used on a Domain
But when it is used on a Domain you require a second CAL for the system that is using it at that time.

While not a major issue for one computer when you are looking at several that increases the costs involved in using XP Mode considerably.

So if a Business has something that is Mission Critical and chose to switch to 7 and use the XP Mode they will double the costs of CAL's needed to run that Mission Critical App. As the XP is a Virtual machine the Server see it as 2 connected computers not 1.

Then there is the issue of what doesn't actually work under XP Mode. wink

Col
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Posted by HAL 9000
Updated - 3rd Aug 2009