According to reports, Microsoft has eliminated the hardware blockade for using Windows 7 XP Mode, but has forbidden users from using the feature. Microsoft found that a great number of consumers are still dependent on the legacy Windows XP operating system, and intended to give those customers an offer to upgrade to Windows 7 by providing a way of maintaining backward compatibility. Also, those who rely on legacy hardware and software, which does not work under Windows 7, can, however, use it in a virtualized Windows XP SP3 setting.

There were two important advantages to adopting XP Mode. The first being that the computer hardware, on which Windows 7 and Windows XP Mode were installed, must support hardware-assisted virtualization. The need for hardware abstraction of computer resources resulted in confusion and criticism from irritated customers who were expecting to gain benefit of XP Mode.

On Thursday, Brandon LeBlanc posted on the Windows Team Blog, "We're announcing an update to Windows XP Mode today that will make it a more accessible to PCs in small and midsize businesses who want to migrate to Windows 7 Professional but have applications that still require Windows XP. Windows XP Mode will no longer require hardware virtualization technology to run".

He added that this change makes it exceptionally easy for businesses to use Windows XP Mode to attend to any application incompatibility barricades that they may have in switching to Windows 7. However, Windows XP Mode will continue to use hardware virtualization technology such as Intel VT (Intel Virtualization Technology) or AMD-V if available.