The 64-bit versions of Windows 7 and Windows Vista don't have a subsystem for running 16-bit applications. This can be a problem for enterprises that have mission-critical 16-bit applications still kicking around. If these apps only need to run on a couple of computers running 64-bit Windows, then Windows XP Mode is a good solution. But what if lots of users need to be able to run these apps?
A solution in that case might be to install the 32-bit version of Windows Server 2008 on a server and then install Terminal Services on the machine and use it to publish the 16-bit applications as RemoteApp programs. Users can then run these programs on the terminal server but they will "feel" as if they are running locally on their own computers. Note that you must use the 32-bit version of Windows Server 2008 to do this because the 64-bit version of Windows Server 2008 does not support running 16-bit apps. And you can't use Windows Server 2008 R2 since this newer operating system only comes in a 64-bit version.