The switch from the previous device caps model to HiDef/Reach means that games cannot opt to run on any windows machine that supports the GPU features they require, or choose to scale their experience down based on available features. If you select the HiDef profile, your game will fail to start if any of the features in the profile are missing. Likewise, the Reach profile prevents you from using HiDef features, so you can't target any of the millions of PCs that occupy that space in-between (for example, anyone with an Intel GPU). While it is theoretically possible to ship a PC game using the Reach profile, the profile is so absurdly limited that you'd be insane to use it for anything larger in scope than a 2-week project.

I don't think they dropped XP support, they just made it harder to use on XP. It does require .NET framework 4, though.