This article (Microsoft Rolls Out Beta of XP 64-Bit Edition) almost gets it right but it loses it right here:
WOW64 is an interpreter that lets old programs (the 32-bit ones we use now) run on the new 64-bit Windows operating system. It can't possibly do this without a loss of performance. The loss may be close to negligible but it'll still be there. It's basically like having two people who speak different languages communicating with an interpreter. The archaic and primitive system (pulling a name randomly from the hat we come up with French) says something to the translator (which speaks both languages, we'll call it British) who then repeats it to the advanced system (for the sake of continuity we'll call this one American English) in terms it can understand. The process works the same in reverse. As the following simulation shows, even simple concepts can be difficult to translate and will add processor overhead and performance loss when running French programs (32-bit) on American operating systems (64-bit).
Frog Program: Putang inamo! (<--made up French words) Please display graphic X.
Brit Interpreter: Sure thing. I'll let the OS know.
(to the OS side)
Brit: OS, please show me something.
Yankee Operating System: What would you like to see?
Brit: Nothing really, it's that French program that's asking.
Yank: Well what does he want to see?
Brit: Graphic X, of course.
Yank: Okay, got it. Where do you want it displayed?
Brit: I told you, I don't give a fig. It's the Frog that's looking for it.
Yank: Then where does HE want it?!
Brit: Dunno. I'll find out.
Yank: Please do.
(back to the program side)
Brit: Hey, Froggie!
Frog: Aloette! Vin! Bleue fromage! (<--Pretty sure this is French for something.) Where is my graphic? I issued that display request nanoseconds ago!
Brit: The Yank needs to know where to put it. And probably what size to display it at, color, whatever. Things don't just always go in the top left corner at the default size anymore, you know.
Frog: Je suis un âne complet et total! (<--Babelfish is so totally cool.)
Brit: What? Speak in 32-bit. I don't understand any of that ultra primitive 16-bit crap.
Frog: I said that you are next to worthless and the only thing more insufferable than you is that unilaterally acting warmongering American OS!
Brit: Well you better get used to it. They're in charge now and you're pretty much powerless to do a damn bloody thing without them.
Frog: Alors je bouderai comme une chienne! (<--Babelfish again)
Brit: What? Why do you keep using that barbaric tongue that nobody in the world knows or cares about except high school students in America who only take it because, unlike Spanish (the only other choice), they will never in their lives be forced to actually use it to communicate?
Frog: I said that I will obstruct the American OS in every manner possible. I have a seat on the UM (Universal Memory) too, you know! I will add zeros and ones all over the place! He won't be able to do a damn thing!
Brit: Okay, I'll tell him. I think that you're making a pretty big mistake though.
Frog: J'ai le sexe avec de jeunes garçons! (<--Cool. We'll stick with the Babelfish for the rest of the skit.)
Brit: Whatever.
(back to the OS side)
Yank: Hey, there! Welcome back. Did you get the location for that graphic?
Brit: No. He totally freaked. Says he's going to obstruct you at the UM and bring your processes to a screaching halt.
Yank: He's only 32-bit. Doesn't he know that?
Brit: I don't think he really gets what that's all about. He thinks he's all top of the line and modern and powerful even in today's environment.
Yank: But doesn't he want that graphic displayed?
Brit: Yeah, I guess so. Hard to tell really but I think he's just pissed that you want to do it. What are you going to do?
Yank: Well, I guess I'll go ahead and just display it anyway. He's only 32-bit. He might stop me at the UM but I'm multithreaded and I'm in tight with the processor. Won't be a problem at all. It probably won't end up exactly where he wants it but it'll look just fine when I'm done.
Brit: Great, I'll let him know.
(program side again)
Frog: Mon chien a les niveaux exceptionnellement bas de testostérone! And you can tell that to the Yank too!
Brit: Uh...yeah. Right. Anyway, I just stopped over to let you know that the graphic is up.
Frog: Excusez-moi tandis que je donne une fessée à mon singe! How dare he do that without my instructions!
Brit: You did give him the instructions. Came right through the UM and everything. You just wouldn't help him with the details so he went and finished the job by himself.
Frog: Ma mère est un hamster! Does he not realize my majesty and power?! I will crush him! I will take that graphic down myself! Or make him turn its display properties over to the UM where it belongs!
Brit: Maybe you should take a look at it first. It looks pretty good.
Frog: Je suis une plus grande putain que Joe Theismann!
So you can plainly see that although the intended instruction of the 32-bit program was indeed carried out by the 64-bit OS there was quite a bit of overhead added and the end result wasn't quite what the 32-bit program wanted. An update on the 32-bit programs will help them to interface better with the translator and the OS but old 32-bit programs are going to be miffed by the new OS until they truly realize that they are in a 64-bit world and are, in effect, the bitch of the new OS.
UPDATE: If you're curious what the French person said but unable/unwilling to translate it, Ilyka has done the work for you.
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