What is a vxd file?

It stands for virtual device driver.

It is a win95/98 file ( used to be .386 files in windows 3.1 ) that allows more than one application to control a piece of hardware, ie mice, touchpads, com ports, network cards etc, without having multiple files all competing for the same resource. The vxd file takes control of the hardware, and gives control of it to the requesting application, and ensures that control is relinquished when the applicatioin is idle or shut down.