Windows XP Mode (Virtual PC) only uses half a CPU core/thread.

Not only does windows xp mode not support multiple cores, to me it looks like it only uses half a core/thread.
I noticed this because I just setup windows xp mode (virtual pc) on my computer.  I updated it, joined it to our domain and then installed our legacy ERP software.  This ERP software was designed and programmed to run on windows 98 or 2000, I can't
remember right now, but its hardware requirements are very low.  This software runs very slows in the virtual pc, with the processor being the problem.  
Matching the processor spike on the virtual pc using both performance monitor and task manager I compared it to task manager running on the host (my windows 7 machine).  The spikes in cpu matched one of the threads on my i7 processor (I use threads
because an i7 has 8 threads but only 4 cores).  To my surprise when the CPU reached near 100% on the virtual PC the same spike on the host was only about 50% of the cpu thread.
The host has a i7 950, 3.07GHz processor.  So this means that the virtual pc can only use up to 1.5GHz.  I have not run into the problem reported in other posts on this forum where the CPU is always at 50% or 100% on the virtual PC because when
their is no activity the CPU drops to 10% or less and stays there.
I will now have to use vmplayer, problem is having enough xp licenses for all users.
Was anyone else aware of this?

You can't use a half a thread.  Windows VPC uses one core at 3.07GHz, there's no halving the speed of the CPU. 
The only way WVPC would use a lower clock speed is if there is power management throttling the CPU speed down.  Do you have a power management setting throttling your CPU?  Are you sure the problem is the CPU and not disk or network related? 
Task manager on the host is not a very accurate way to determine CPU usage of the VM.
If you have the correct version of Windows 7 (Pro or higher) there are no issues with XP Mode licenses, you get one license included with Windows 7.  There's no restriction requiring you to use XP Mode with Windows VPC, it will work under 3rd party
virtualization solutions.

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