For example.....You have a program that will run perfectly on Windows 98, but it won't run on Windows XP. You can tell Windows XP to run that program in Windows 98/ME Compatibility Mode, thus effectively hiding itself from the program in question and making the program think that it is running in Windows 98.
You can enable Compatibility Mode for any program that you choose. Simply find the EXE of the program, right-click on it, choose Properties, click the Compatibility tab, and set the preferences.
You can find more detail on Compatibility Mode from this KB article:
How to Troubleshoot Program Compatibility Issues in Windows XP (Q285909)
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