Winbeta released 2 of the most anticipated apps for Windows 7. They are Windows Virtual PC(WVPC) and Windows XP Mode. If im not mistaken these apps only work on the RC of Windows 7. Which is released to the public on May 5th.
Note: I just tested this on Windows 7 build 7057 and it worked.
XP Mode consists of the Virtual PC-based virtual environment and a fully licensed copy of Windows XP with Service Pack 3 (SP3). It will be made available, for free, to users of Windows 7 Professional, Enterprise, and Ultimate editions via a download from the Microsoft web site. (That is, it will not be included in the box with Windows 7, but is considered an out-of-band update, like Windows Live Essentials.) XPM works much like today’s Virtual PC products, but with one important exception: As with the enterprise-based MED-V (Microsoft Enterprise Desktop Virtualization) product, XPM does not require you to run the virtual environment as a separate Windows desktop. Instead, as you install applications inside the virtual XP environment, they are published to the host (Windows 7) OS as well. (With shortcuts placed in the Start Menu.) That way, users can run Windows XP-based applications (like IE 6) alongside Windows 7 applications under a single desktop.

Both apps running
To run Virtual XP Mode, users must be running Windows 7 Professional, Enterprise or Ultimate with preferably 2GB of RAM with at least 256MB available to virtualization, and a processor that supports hardware virtualization. Many times hardware virtualization needs to be enabled in the BIOS to be functional.
Release Name: Microsoft.Windows.Virtual.PC.and.Windows.XP.Mode.for.Windows.7.Build.7100.x86-WinBeta
Size: 447MB
Links: Official Site
Download: NewTorrents – Depositfiles