V7 does work with XP. Even though V6 Rescue Media (at least reasonably recent V6 media) should be able to restore backups created with V7, I'd recommend creating new Rescue Media if you're upgrading to a new version of Reflect.
As for what's new, if you're on an XP system, the answer is very little at all. Here
is a What's New page relating to the initial release of V7, although none of those features work on XP. Reflect 7.1 added Macrium Image Guardian (high level summary here
) but that doesn't work on XP either. And 7.2 added several new features, some significant and some minor. Those are described here
. The only items in that list that would apply to XP are the simplified Rescue Media Builder wizard (but not the WinRE or WiFi support aspects), possibly the background update checker, and the new "warning" outcome for backup jobs instead of the previous success or failure outcomes. That last one admittedly can be quite useful as an early warning of potential problems, but warning outcomes should also hopefully be an edge case. There have also been some minor enhancements along the way, but I don't have that list handy, and they're minor. So unless you're upgrading purely to gain support coverage from Macrium, you might want to consider whether V7 adds enough value on an XP system to justify the upgrade. Or of course consider replacing that XP system given that it hasn't been supported by Microsoft or any major browser vendor for quite a while now. The fact that it works doesn't necessarily mean it's safe to use, especially if you have that system on the Internet. If you need to keep that system alive, perhaps consider capturing an image of it and then using it as a VM on some newer system. Even the two generations newer Windows 7 will be hitting end of support soon.