Is this legal? Entirely. Apple isn't pirating Windows XP. It's offering software that simply allows XP to run natively on Macs. You still have to supply the XP installation disk, meaning a lot of Mac owners may soon be checking out the Windows aisle at their local computer store.
Why did Apple release this software? There are probably a lot of reasons. Hackers had already been able to create a kludgey way of booting Windows XP on the new Macs, mostly because they wanted to see if it's possible. But Apple had, until today, expressed little interest in making it easy to do. Including it in its upcoming version of Mac OS X 10.5, or "Leopard," also adds real value to that upgrade for Mac owners -- making it more likely that they'll buy it. It also means that would-be Mac owners who must run a program that works only in Windows can now buy Apple hardware and keep using their Windows-only software.
How else could this be good for Apple? This could be extremely beneficial to Apple's market and mind share. Apple will see computer sales rise as people see a win-win situation and try the company's computers. In essence, they're getting two computers in one -- a Macintosh that runs Mac OS X and Windows XP. If even a quarter of new Apple customers stay on Macs, Apple's market share will boom. Developers will see this and respond accordingly.
What does this mean for companies considering a switch to Mac hardware? It means they have a backup plan if they choose not to go solely with Mac OS X. Any Apple hardware using Intel's chipset can run Windows, and any company looking to try Macs, risk free, now has a legitimate exit strategy if they find that the Mac platform isn't what they were looking for. This is very much a win-win situation for Apple's customers.
Why did Apple do this now? Apple is touting this as a preview of one of the features for Leopard. Consider that hackers have already gotten Windows XP to run on Mactel hardware, virtualization software company Parallels announced plans to offer something similar and there are a variety of open-source projects in the works. In light of all that, Windows on the Mac was only a matter of time. But to have Apple officially support this is a huge vote of confidence to companies and individuals wanting to try Macs but afraid of spending hundreds of dollars for untested and (as far as they are concerned) unproven technology.