It's only the expensive "Professional" versions of Windows 7 that include emulators of Windows XP. There is a "compativility mode" setting that accommodates software designed for some (not all) operating systems.
I have 64-bit Windows 7, and it won't run some software designed for 32-bit systems. I think that's what causes me more problems, the difference between 32 and 64 bits. I lost a favorite scanner because of that. It won't run on a 64-bit system.
I've heard that there are problems upgrading to Windows 7 on systems earlier than Windows XP, but that you can do a "clean install."
-Joe-