I've found that it's much better (in my case) to run without integration features enabled on an XP VM. When I have them enabled, the following happens: - Can't do Start->Shutdown (it's removed from the menu) - Sometimes hangs if you click the Close icon (and have it set to shutdown) - CPU often sits at 99% usage by rdpclip.exe Instead, I disable integration features and run a UltraVNC service in the VM and I control the VM via an UltraVNC client running on the host. As it's local, the screen updates are immediate and I can run it at full colour. So it's indistinguishable from controlling the VM directly. The advantages I gain by controlling it via UltraVNC (not just any VNC) are: - I can do Start->Shutdown (it's back on the menu) - It never hangs when shutting down - CPU never gets to 99% because rdpclip.exe never runs - Clipboard synchronization is handled by UltraVNC (any VNC will do this part) - You can do file transfers to/from the VM using UltraVNC's File Transfer feature (not avail on other VNCs) So you *almost* get your drag/drop back, courtesy of the file transfer. If you prefer to control the VM directly rather than doing it through the VNC client window, just minimize VNC and do that. You'll still get the clipboard integration. You'll have to go back to the VNC client window for any file transfers though. Even if my question here on why rdpclip.exe uses 99% cpu gets resolved, I still might stick to this method because shutdown isn't screwed up and file transfer is available.