VPC 2007 can provide improved performance by utilizing the hardware virtualization support built into many recent AMD and Intel CPUs, but because our system's older processor lacked such support, we couldn't take advantage of this hardware-assisted virtualization. Having a dual-core CPU is of limited value since VPC 2007 can only make use of a single CPU.
To switch keyboard and mouse control between guest and host operating systems, VPC 2007 utilizes a customizable hotkey, but if you're using a supported operating system (the ones mentioned above, or OS/2), you can also install Virtual Machine Additions (VMA). VMA provides additional features and tighter integration between host and guest(s), including the ability to move seamlessly between guests (or guests and the host) sans hotkeys, plus support for folder and clipboard sharing and dynamic resizing of VM windows.
Like its competitors, VPC 2007 allows you to suspend and resume guest OSes and provide them with various levels of network connectivity by automatically bridging the host PC's network adapter. Unfortunately VPC 2007 doesn't offer USB interface support, and while not everyone will miss it, it is often useful to be able to recognize USB devices (particularly flash or hard disk drives) within virtual machines.
Feature and licensing limitations aside, Virtual PC 2007 will be a good choice for many especially when compared to the cost of other options (Parallels costs $50 and VMWare Workstation is $190). Perhaps not suprisingly, Microsoft is pushing VPC 2007 as a platform for evaluating other products in the company's repertoire; you can download a variety of ready-made VHD files at www.microsoft.com/technet/try/vhd/default.mspx.
Pros: Free; provides a simple way to use an older application or operating system
Cons: Not licensed for use with XP Home, Vista Basic or Premium; no USB support; incompatible with Ubuntu 7.04