The “Windows XP Mode” in “Windows 7” which uses “Windows Virtual PC” is amazing. I have used two Virtualization software earlier including VMware Server and Microsoft Virtual PC (which was the previous version of Windows Virtual PC) but Windows Virtual PC is very fast as it feels like you are running the guest operation system (Windows XP) on physical machine rather than on Emulator/Virtualization software.
And it truly feels great when you have two monitors attached to computer and you have Host Operation System (Windows 7) running on one monitor and Guest Operating System (Windows XP) on other.
Please click on image for high resolution screenshot.
It depends how many legacy software you have which require Windows XP to run properly and how long you spend on them but running Windows 7 and Windows XP side-by-side in two monitors should increase the productivity when you need latest features of Windows 7 and legacy software running at the same time.
You can also use Windows XP in the regular Windows 7 window as shown in the screenshot below.
Please click on image for high resolution screenshot.