I'm working on a head-to-head review of Parallels and Fusion, two competing virtualization packages on OS X, for InfoWorld. As part of that review, I'm doing a Vista install in both to check the experience, resource usage, and so on.
One of the cool features of Parallels is something they call "Smart Select." With Smart Select you can specify which file types are handled by which application and in which OS. So for example, you can specify that Word docs are always opened in Office 2007 in Windows, regardless of which OS you click on the document. Or that clicking on a URL, regardless of which OS you're using always opens the page in Safari on the Mac.
Since the application windows can float free of the virtual machine--like native windows, you end up with Word 2007 running on your desktop--just like it was natively installed. Parallels calls this "Coherence" while Fusion calls this "Unity." I described the spooky feeling this gave me the first time it (unexpectedly) happened to me on my blog a few weeks ago.
So, back to Vista. As I was loading it, I was wondering: if the primary reason people run Parallels or Fusion is to run Windows applications--rather than to experience the OS itself, why would anyone install Vista? As far as I know XP will run all the applications that Vista will. When all you want is the app, XP will do the job as well as Vista. You probably already own a license and it's less resource intensive. Just use it.