There is a custom built software that has been developed and tested for Win XP and currently is in use on Win XP systems, there are instrumentation hardwares that interface with the software. Everything is working as designed so far.
Now there is a plan to migrate all Win XP to Win 7. In the scenerio that updates may not be available for the the software to work on Win 7, I have identified the following options
I would like to know
The software might or might not work under Windows 7. You should try it and see.
XP Mode (or another VM solution) works quite well to keep legacy user applications running. Basically, you are "cheating" the upgrade path by running the application under XP. However, since your application interfaces to a hardware device, you may have trouble. Your typical VM solution "hides" the underlying host PC hardware from the software.
How does the instrumentation hardware interface to the host PC? Is it a PCI/USB device with special drivers?
Some VM Solutions allow PCI or USB passthrough, which would allow your device to continue to work even through it is in a VM. However, this is still not Windows 7 upgrade. (You would probably be running an XP VM under VMware ESX.)
So what about upgrading to Windows 7 and forgetting the VM?
If you need drivers for your hardware device, your new system is Windows 7 x64, and your old system is Windows XP 32-bit, you will have a problem. A 64-bit build of Windows needs 64-bit drivers.
If your Win7 system is 32-bit, a 32-bit Windows XP driver might work. It depends on how the driver was written. You may very well run into issues, but you will not know until you try.