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My old computer is going to get Ubuntu 7.10 installed. XP will be switched to my new computer for the time being. How does Ubuntu handle games that are made for Windows 9x\XP? IE: Racing Sims and things like UT?

Games are a little tricky. They work well if made for Linux, but games for Windows may not install or work, or may work, but will need some work to get them installed.

For straight linux games, FPS to try are Sauerbraten and Nexuiz (both can be online multiplayer, decent graphics).

Otherwise, some Googling may be in order. I'd think searching for the name of the game you want to try, along with linux, and possibly something like the word "install", or along that line. Some games have a step by step.

Another tool, not free, but it may get more games to work, is Cedega, possibly, but I've never tried it.