Well, you're running XP in a window, basically.
Fast, faster than installing it normally. Exactly the same; on first time on desktop, you get the "take the tour" popup, that kinda stuff. Disks of the host system show up as remote desktop connections, but the DVD drive is native(?) and the C: drive is a virtual drive that resides on the hosts HD in the folder where you installed XP mode. Hardware used in XP mode is all general virtual stuff, not actual hardware of the host (no need for drivers). Memory is 256MB, but configurable, limited by the total memory of the host.
I guess it's 32-bit, since system properties shows "physical address extension" below the memory amount. (running 64-bit host with 4GB mem)
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