Can you use applications that are designed for XP/Vista on Windows 7? Are they automatically compatible or do you have to alter a few settings of something?
Most are compatible, the ones that aren't you can run in compatibility mode or in XP mode which create a virtual environment for the program to run in.
You should still do your homework though. 99% of mainstream programs will work, but there are proprietary software out there that probably won't work.
Check out the Compatibility Center for advice on just about every program. Be advised that it may say something doesnt work and it still might. Some things are listed as not compatible just to try and get you to update to the latest version at a cost.