Windows XP mode is an optional add-on to Windows 7 that provides a seamless virtual environment to run applications depending on XP.
If it becomes necessary to uninstall Windows XP Mode, all you have to do is to uninstall it as you would with any application from the Control Panel. This action will automatically remove the VHD files, including a system-protected VHD file, which is a virtual image of Windows XP.
However, if the system protected VHD file is left on the computer (e.g. a copy) after the XP Mode is uninstalled, it may require a custom tool and process to get rid of it.
Check out this blog post to find out the detail.