Virtual PC 2007 can be used with Vista or XP
If you install and test Windows 7 on a HyperV System you will find that there is another addon that you can install to the MS Virtual PC that is a full blown copy of XP Pro SP3. Admittedly it's a virtual Machine but it works OK and it's free. These are the latest downloads.
http://blogs.zdnet.com/hardware/?p=5091
Windows Virtual PC RC
Brief Description
Windows Virtual PC (RC) is the latest Microsoft virtualization technology that allows you to run many productivity applications on a virtual Windows environment, with a single click, directly from a Windows 7-based PC
http://www.microsoft.com/downloads/details.aspx?displaylang=en&FamilyID=4c3a0944-a2e6-4f01-9c57-5b55885875cc
Windows XP Mode RC
http://www.microsoft.com/downloads/info.aspx?na=45&p=3&SrcDisplayLang=en&SrcCategoryId=&SrcFamilyId=4c3a0944-a2e6-4f01-9c57-5b55885875cc&u=details.aspx%3ffamilyid%3d487F1E8B-F868-4C1E-A047-1B2306C0F592%26displaylang%3den
A lot of older software isn't compatible with Vista or W7. For instance I have Magic ISO that will not run in either newer OS. My antiquated RegSnap will run in all of the OS's. It doesn't seem that long ago that we had the same problems with XP.
My main system doesn't support either Virtualization Technology or Hyper Threading Technology that is probably why W7 won't let me install Virtual PC 2007 or Virtual PC 2009. I'll be going to Vista on this System.
The System that does support Virtualization has Virtualization Technology enabled but it doesn't support Hyper Threading Technology. I'll be installing W7 on this System in the near future.
When I try to run Virtual PC 2007 or Virtual PC 2009 in W7 on the System that doesn't support either Virtualization Technology or Hyper Threading Technology, I get this error message.
Windows Virtual PC requires hardware assisted virtualisation. There is no hardware assisted support in the System.
Maybe the final release of W7 will allow you to use Virtual PC 2007, we will have to wait and see.
In a virtual environment you can Map to a Physical drive. I had no problems connecting from a Virtual Machine running XP Pro on an XP Pro System, mapping a drive on Windows 7. I could even use remote access to connect to the Virtual Machine from W7.
What about Vista SP1 on Windows Virtualization on Windows 7? It should run in that environment.
Vista will run in Virtual PC 2007 on an XP or Vista System that has the necessary hardware.