Some key changes in this release include:

• Granular drive sharing
  
  In the settings on the virtual machine, you can select specific host computer drives to share with the virtual machine.
  
  
• Manage USB devices with virtual applications
  
  While running virtual applications, you can manage USB devices by using the Virtual Applications icon on the task bar.
  
  
• Windows XP Mode tutorial
  
  A Windows XP Mode RC tutorial, which introduces the product features, is displayed during Windows XP Mode Setup.
  
  
• Jump list for virtual applications
  
  Right clicking on the virtual application icon for Windows XP Mode, on Windows 7 taskbar, displays a jump list that allows one to easily launch virtual applications from the taskbar.
  
  
• Faster Windows XP Mode Setup
  
  Windows XP Mode Setup completes more quickly than in Windows XP Mode Beta.
  
  
• Compact differencing disks
  
  You can compact the differencing disks to decrease the file size.
  
  
• Ability to install Windows XP optional components
  
  Windows XP optional components can be installed in Windows XP Mode RC without prompting for Windows XP media.
  
  
• Ability to choose a location to store virtual machine files for Window XP Mode RC
  
  When you are setting up Windows XP Mode RC, you can choose where to store all virtual machine files for Windows XP Mode RC. The default path is: %LOCALAPPDATA%\Microsoft\Windows Virtual PC\Virtual Machines\.
  
  
• Option to turn off and discard changes when Undo disk is enabled for a virtual machine
  
  An additional option is available when you are turning off a virtual machine: Turn off and discard changes. This option will delete the current Undo disk, and turn off the virtual machine.

Source: http://blogs.msdn.com/virtual_pc_guy/archive/2009/08/04/windows-virtual-pc-rc-now-available.aspx