How can I run another application within a panel of my C# program?

Using the win32 API it is possible to "eat" another application. Basically you get the top window for that application and set it's parent to be the handle of the panel you want to place it in. If you don't want the MDI style effect you also have to adjust the window style to make it maximised and remove the title bar.

Here is some simple sample code where I have a form with a button and a panel:

using System;
using System.Collections.Generic;
using System.ComponentModel;
using System.Data;
using System.Drawing;
using System.Linq;
using System.Text;
using System.Windows.Forms;
using System.Diagnostics;
using System.Runtime.InteropServices;
using System.Threading;

namespace WindowsFormsApplication2
{
    public partial class Form1 : Form
    {
        public Form1()
        {
            InitializeComponent();
        }

        private void button1_Click(object sender, EventArgs e)
        {
            Process p = Process.Start("notepad.exe");
            Thread.Sleep(500); // Allow the process to open it's window
            SetParent(p.MainWindowHandle, panel1.Handle);
        }

        [DllImport("user32.dll")]
        static extern IntPtr SetParent(IntPtr hWndChild, IntPtr hWndNewParent);
    }
}

I just saw another example where they called WaitForInputIdle instead of sleeping. So the code would be like this:

Process p = Process.Start("notepad.exe");
p.WaitForInputIdle();
SetParent(p.MainWindowHandle, panel1.Handle);

The Code Project has a good article one the whole process: Hosting EXE Applications in a WinForm project

I don't know if this is still the recommended thing to use but the "Object Linking and Embedding" framework allows you to embed certain objects/controls directly into your application. This will probably only work for certain applications, I'm not sure if Notepad is one of them. For really simple things like notepad, you'll probably have an easier time just working with the text box controls provided by whatever medium you're using (e.g. WinForms).

Here's a link to OLE info to get started:

http://en.wikipedia.org/wiki/Object_Linking_and_Embedding

If you want to run notepad inside your app you would probably be better of with a text editor component. There's obviously a basic text box that comes with WinForms, but I suspect more advanced components that offer Notepad functionality (or better) can be found on the interweb.

I know this is possible if the other application can attach itself to a win32 window handle. For example, we have a separate C# application that hosts a DirectX application inside one of its windows. I'm not familiar with the exact details of how this is implemented, but I think just passing the win32 Handle of your panel to the other application is enough for that application to attach its DirectX surface.

No

Only if the other application is designed to allow it, by providing components for you to add into your own application.