Application compatibility is one of the most time consuming aspects to a Windows deployment project. You basically have to test every install and every application execution on your new OS before you can roll it out. For many companies, that can be as many as a couple of thousand applications. Often much of the cost is hidden because it is the business user community who have done much of the acceptance testing. 1E will be doing more on this topic... coming soon...
The burning question is... what do you do after you have found an application which is not compatible with your new environment? The best answer is to decommission it, but the life of an IT administrator is never that simple.
I have just found this excellent article on the Microsoft Windows Team Blog site. It explains the differences between MED-V and XP Mode on Win 7, which are two possible options for managing these incompatible applications. Basically, you can run the applications within the context of Windows XP... but on a Windows 7 machine and the user experience is virtually seamless.
http://windowsteamblog.com/blogs/business/archive/2009/04/28/how-med-v-v2-helps-you-manage-windows-xp-mode.aspx
Definately worth a look.
Read the complete post at http://www.1e.com/techblog/post/2009/08/11/The-difference-between-MED-V-and-XP-Mode.aspx