This is an update of information on this old thread :
Using Windows XP Mode, you can run programs that were designed for Windows XP on computers running Windows 7 Professional, Enterprise, or Ultimate editions. Windows XP Mode isn't supported on Windows 8.
so this will from what the article says only work if your windows 7 has the " Windows 7 Professional, Enterprise, or Ultimate editions.!"
here is the article in full :
http://windows.microsoft.com/en-us/windows7/install-and-use-windows-xp-mode-in-windows-7