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I have an XP-mode VPC that I've installed some things on. How can I create a brand new instance or clear this one back to the default state from the template? I thought if I tried to create a new VPC it would offer me an easy "use template" option but I didn't see anything I understood.

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Open Virtual PC and delete the WinXP instance. Then in your startmenu you should still have a Windows XP Mode shortcut. Click it and you will see a dialog saying "the instance was not found do you want to create a new one?".

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