MSVDM enables multiple desktops for Windows XP, a feature that happens to be at the fingertips of GNU Linux users. Most of you probably have no clue as to how useful it can be.
Multiple, or ‘virtual’, desktops help users classify, and hence group, their tasks or applications into each of the virtual spaces provided. For example, you can work on documents on desktop #1 while simultaneously running a chat or mail program on desktop #2. You can have up to four desktops. (As you can guess, if someone’s looking over your shoulder and you want to hide what you’ve been doing, this is the tool you’ve been looking for!)
Virtual desktops are numbered on the taskbar. Also accompanying these is a preview button, called a pager, that provides a miniature glance of all the desktops along with the apps running on them. Keyboard shortcuts can be configured for the above purpose. Well, here’s how you go about configuring multiple desktops.
Step 1. Installation
As this is not part of the Windows XP package, you’ll need to download MSVDM from Microsoft’s PowerToys site:
http://www.microsoft.com/windowsxp/downloads/powertoys/xppowertoys.mspx
The installer runs a wizard that guides you through the installation process. Note here that the installation folder is C:Windows system32 and not C:Program Files as you might expect it to have been (assuming C: is your Windows drive). The installer adds msvdm.dll under .System32.
Step 2. Enabling The Desktops
You’ll perhaps wonder what changed, as there might not be a visible difference. Well, right-click on the taskbar and enable (check) ‘Desktop Manger’ from the menu. 
On doing so, five buttons appear to the left of the system tray. The first button is the ‘preview’ button, and the rest, numbered one through four, are your four virtual desktops.
Step 3. Configuring The Settings
There are a few settings that you can customise. We’ll take a look at them in general and follow this up with an optimal customisation.
‘Shared desktop’ is enabled by default. The taskbar buttons of the apps running in any of the four desktops will be visible. You can toggle between them using [Alt] [Tab], or by clicking on their taskbar buttons. Disable this option to view open applications only in their respective desktops. 
‘Configure desktop images’ allows you to change the background images of each of the four desktops. You can even browse and select a picture other than those provided by Windows. You can stretch, tile or centre the images.
It would be desirable to have keyboard shortcuts to browse through the four desktops. ‘Configure keyboard shortcuts’ does just that. All you need to do is change the entries under Key1 and Key3. Key2 is optional.
It is so uncool to display ‘MSVDM’ on the taskbar! Also, if you are primarily a keyboard user, you would not prefer to see the buttons either. You can disable both by right-clicking any button and then on ‘Show title’ and ‘Show quick buttons’ respectively. 
By default, animations are enabled. For faster performance, you can disable ‘Use Animations’ from the taskbar menu. Also, the default shortcut keys may be changed according to your preference for easier and quicker navigation. Windows will warn you if any pattern is already in use.
If you’re using virtual desktops for the first time, there’s a good chance you’ll absolutely fall in love with the idea!