bill - 7:51 am on Jan 18, 2011 (gmt 0)
coopster is referring to XP Mode, which requires the Professional or Ultimate version of Windows 7. The Home versions don't have this.
You could try another virtualization option like VMware or Microsoft's Virtual PC. It just won't be as smooth and integrated as XP Mode. XP Mode includes a licensed copy of XP to work in the virtual environment. It also runs seamlessly from your Windows 7 desktop.