Why do you conclude that? Have you even tried using the Windows XP Mode? (Works great for me)
Running Windows XP natively and running Windows 7 Pro/Enterprise/Ultimate with Windows XP Mode are both perfectly reasonable options depending on your needs.
The downgrade option seems to be only for volume versions of Windows, since a user with a retail or OEM version of Windows would have to jump though a lot of hoops to do it, including convincing a Microsoft representative over the phone, that you are NOT a pirate even though you are trying to activate Windows XP with a serial number already used on another computer. The process seems designed to discourage private and small-business users from exersising their downgrade rights. :rolleyes: