So the XP layer helps users run those applications, while also letting Microsoft actually *improve* their OS in the way that Apple and Linux (systems who don't give half a whit for backwards compatibility) can.
When OS X was introduced it included an OS 9 VM for years ("classic mode"). After the switch to Intel OS X included a PPC VM ("Rosetta") which still allows all PPC programs to run on Intel Macs. In fact, with 3rd party software (e.g., VMWARE Fusion and a copy of Windows XP), a Mac is exactly as compatible with old Windows programs as a PC is.
Republicans have no basis for posing as fiscal conservatives at this point, having overseen a 10 to 20 trillion dollar expansion in the US debt. Given an economy that is collapsing, losing jobs at the rate of 600,000 per month currently, there is really nothing else to try right now other than government spending: the Fed overnight rate is at 0% so we've run out of fiscal policy. Giving tax cuts to people that they save in the bank will do nothing to stimulate demand. Banks don't need more savings -- they already have free credit from the Fed and are still afraid to lend! The fact that the Republicans insisted on removing $40 billion from the package that was aid to the financially strapped states is incomprehensible to me! This is obviously money that is ready to be spent, which is exactly what a stimulus is about! As GDP drops, government revenues also drop, and so not providing a stimulus could easily cost the government more than doing it!
There is also some real urgency here. Overstimulation of the housing market should not bring down the whole economy, but uncontrolled leveraging and hedging have made that a real possibility. If financial blood flow is not restored soon chunks of the economy will die needlessly and a large portion of the workforce will lie idle and unpaid.
"What man has done, man can aspire to do." -- Jerry Pournelle, about space flight