Utilize the VHD technology and setup a multi-boot Windows environment.
Portlock Leap Frog will assist you in creating a bootable Virtual Hard Disk (VHD) for native Windows deployment with your Windows XP, Windows Vista, Windows 7, and Windows Server 2003, Windows Server 2008 or Mac OS X Snow Leopard machine. The VHD can be used as the running operating system on supported hardware without a virtual machine or hypervisor. Portlock Leap Frog has been developed and designed to provide end users the ability to utilize the new VHD-boot capabilities in Windows 7 and Windows Server 2008 in one easy to use wizard.
With each system startup, I can select Windows 7 or XP
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Pros
I didn't want to get rid of XP as I have some older software that will not run on Windows 7, but I still wanted to use 7. I installed this program on XP and used it to install Windows 7. Now I just reboot and pick which one I want to use, XP or 7.
Cons
None that I can think of at the moment. It did what I wanted it to do, which is allow me to keep XP and all of my apps, and also use Windows 7.
Summary
XP users not being able to use Windows 7 unless they got rid of XP and all of the software installed on XP is not quite true. This program provides a good workaround.