MED-V is a core component of the Microsoft Desktop Optimization Pack (MDOP) that enables deployment and management of Microsoft Virtual PC Windows® desktops to launch and test environmental test scenarios. With MED-V the organization can upgrade to the latest version of Windows even some applications are not functioning or supported by the latest version.
MED-V builds on top of Virtual PC to run two operating systems on one device and provides virtual image delivery, policy-based provisioning, and centralized management.
Simply saying, we can run Windows XP on Windows 7 and launch applications installed in Windows XP from Windows 7.
What do we need?
MED-V Software, Virtual PC 2007 SP1, MED-V Virtual Machine Additions Update
Where do we get it?
MED-V software is part of MDOP 2009 Microsoft Volume Licensing Site (MVLS)
For more info:
http://technet.microsoft.com/hi-in/windows/ee532035(en-us).aspx