Why is Virtual PC being bundled with Windows 7 significant? [closed]

Because instead of having to limit their opportunities in developing new features due to backward compatibility, they can now basically say screw it. By bundling a virtualized version of the previous OS, it won't impact things as much when they change interfaces, system APIs etcetera - basically enabling them to be more innovative.

Furthermore, it'll also ensure 100% compatibility, which is otherwise a major reason for enterprise clients not to upgrade OSs.

1) Yes, Microsoft has always provided backwards compatibility, but it comes at a massive cost, shipping a virtualised OS significantly reduces this cost.
2) Yes, that's the point of having the virtual OS running alongside the main OS - the user won't be able to tell the difference.

Remember that Microsoft considers VM instances to be full installations of XP, and thus require their own license. So in addition to Mark S. Rasmussen's excellent answer, it's important because Windows 7 includes a complete license to a virtualized copy of XP.