1) I have tested XP mode and it works brilliantly, so any applications that don't run under Win7 should work under XP mode. BUT!! Keep in mind that XP mode does not enable certain features such as 3D acceleration.
2) 16 bit apps will NOT run natively under Win7 x64. However, you should be able to run them in XP mode since it operates in 32bit.
uuuufffffff dont you have new apps to replace the old ones?
Some of the programs I use go back almost 20 years. These are not mainstream programs created by a company. They are created by one programmer. I have a few of these. I do not know where these people are. Another company has discontinued the product. Yet, these programs have remained valuable to me.
Windows XP Mode runs a virtual Windows XP Professional 32bit environment within Microsoft Virtual PC and publishes an installed application from the Windows XP virtual machine to the Windows 7 desktop. As such all applications which run within Windows XP Professional SP3 32bit will run in XP Mode. 16 bit applications run within an emulator inside 32 bit Windows called Windows on Windows (WoW) similar to how contemporary 32 bit applications run within WoW64 on modern 64 bit Windows.