Windows 7 introduces a new feature that allows you to install and run applications in Windows XP environment, you can still run applications which are not supported Windows 7 by using the Windows XP mode. (A virtual Windows XP environment for Windows 7).
But not all computers support this feature, you must have a processor that supports hardware virtualization, also you need to enable it in BIOS in order to use windows xp mode.
Microsoft released HAV (hardware-assisted virtualization) detection tool that helps you check if the processor supports hardware virtualization or not.