I wanted to see if good old Diablo II would work under Win7 (x64) ... i didn't expect it too but that should not stop me from trying 
Diablo installed just fine but would not start ... the game reported that the hardware was unsupported ... tried to install XP under virtual PC ... same result ... tried the XP mode for win 7 ... it could not start the virtual application (but it made the correct entries in my win 7 start menu).
I finally downloaded a trail version of vmware proffesional. Dioblo runs "fine" under vmware...vmware is using around 70% CPU but it works ...
Is XP Mode for Win 7 not supposed to address this issue? If not ... what are you using XP mode for?