I have configured and installed applications on computers with Windows 7. The XP mode solves many problems, but not all. There were massive issues when applications used to store data under C:\Documents and Settings\All Users\Application Data\.. (XP), now that data ends up in AppData\
Roaming\ (W7 and up). Now imagine a badly tested client application that assesses data with a fixed path and you have a situation where migration is not at all trivial.
Another example, many programs that used to be in C:\Programs now go to C:\Programs (x86), simply because otherwise W7 locks the rights to write into their own files, even writing a value into a simple <myApp>.ini would fail.
There are reason not everyone will update from XP for many years. Some still use software like AutoCAD 2000, that costs thousands of dollars, with parallel port dongles, and so on
Personally I hope to make the switch this year, but I can't without careful preparation ..
Also, what TG626 said: Windows Home Editions have no XP compatibility mode