As reported yesterday, Windows XP Mode will no longer require hardware virtualization technology to run.
There were certain prerequisites required to run Windows Virtual PC and XP mode.
The prerequisites include a processor which supports hardware assisted virtualization (HAV) which is also enabled in the BIOS.
If you install Windows Virtual PC and Windows XP Mode on a computer that is running Windows 7; when you try to start or configure Windows XP Mode in Windows Virtual PC, you will receive one of the following error messages:
Unable to start Windows Virtual PC because hardware-assisted virtualization is disabled, or
Cannot start Windows Virtual PC Host Process. Check the System event log for more details, or
Windows Virtual PC cannot start because this computer does not support hardware-assisted virtualization.
To remove these prerequisitse, install this update, KB977206. After you install this item, you may have to restart your computer.
Do note that after you install this update, you may be unable to copy and paste files between Windows 7 and Windows XP Mode (or any other virtual machine). To work around this problem, copy and paste through the shared Windows 7 drives that you can access from the virtual machine.