Within Windows published part 2 of their Windows XP Mode Internals series

As mentioned in that boring overview yesterday, Windows XP Mode (XPM) utilizes some key RDP (6.1+) technologies to enable seamless virtual application use in Windows 7. More specifically, Remote Applications and Application Publishing.

For those not Terminal Services wizards, these technologies may sound new. Application Publishing enables you to “install” an application on a client machine – at least as far as the user is concerned. Shortcuts and file-type associations are set up, just as a local installation would, but when the application is invoked it’s started on a server somewhere within your infrastructure. The Remote Applications piece then kicks in and draws the client UI in a very convincing manner.

Windows XP Mode Internals – Part 2 (Application Publishing Magic)