vmware can run any windows application because what it does is create a virtual machine (hence the name) on your linux box. You create a directory for windows and when you set up vmware you tell it the name of the directory to use for windows. When you run vmware it will run windows 95/98/NT in a window like an application where you can run, install, remove or do anything you would in windows. See
The first option is is more memory-sparing, but it is rarely completely compatible with Windows, and some apps may not run. The second method uses a lot of RAM, but has fewer compatibility problems.
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