Windows XP Mode is a specialized virtualization feature designed specifically for Windows 7 Professional, Enterprise, and Ultimate editions. It allows you to run older productivity applications that are incompatible with Windows 7 directly within a virtualized Windows XP Professional Service Pack 3 environment.
To successfully run Windows XP Mode on a 32-bit Windows 7 Ultimate installation, your hardware must meet these minimum thresholds: Windows XP Mode - Installation in Windows 7 Windows XP Mode is a specialized virtualization feature
For Windows 7 Ultimate 32-bit users, this feature provides a fully licensed copy of Windows XP at no additional cost, integrated seamlessly into the host desktop. Core Requirements for 32-bit Systems Windows XP Mode is a specialized virtualization feature