Microsoft on Thursday released to manufacturing an add-on that allows computers equipped with the new Windows 7 operating system to run older applications that were designed for Windows XP.

Windows 7 screen shot
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The utility, known as Windows XP Mode, is built with an eye to small and mid-sized businesses that often rely for years on the same set of specialized applications for key business functions and don't frequently upgrade.

With that in mind, Windows XP Mode is designed for use on the Professional, Enterprise, and Ultimate versions of Windows 7.

Fear of application incompatibilities caused many businesses to forego upgrading their PC operating systems from XP to Windows Vista, a fact that helped doom Vista in the business market soon after it was released in early 2007.

In developing Windows XP Mode, Microsoft is clearly hoping a similar fate won't befall Windows 7.

"We expect many Windows XP applications to be compatible with Windows 7," said Brandon LeBlanc, Microsoft's in-house Windows blogger, in a post Thursday. "However, Windows XP Mode is meant to serve as an added safety net so small and mid-sized businesses can migrate and run Windows 7 without any roadblocks," said LeBlanc.

Microsoft is leaving it up to its computer manufacturing partners whether to include XP Mode on their Windows 7 computers, but users in any event can download the utility from Microsoft's Windows Web site starting Oct. 22nd—the same day that Windows 7 is released to the general public.

The full version of Windows 7 Home Premium is priced at $199, with an upgrade from Vista or XP costing $119. The full version of Windows 7 Professional is $299, with upgrades going for $199. Windows 7 Ultimate is priced at $319, with the upgrade version at $219.

InformationWeek has published an in-depth report on Windows 7. Download the report here (registration required).