Virtualization is a hot topic these days when processors and computers are too powerful for a single user or server needs. Virtualization has a big range of usage scenarios ranging from server consolidation to testing and development environments. Although majority of users think VMWare when they talk about virtualization the truth is that the market is far more rich offering products with totally different approaches.
Hardware level virtualization (VMs)
VMware (an EMC company) is offering one of the oldest and most appreciated hardware level virtualization products. This is coming in both workstation and server flavors. Due to recent competition in virtualization market, the company extended its offer with 2 free products: VMware Server (the old VMware GSX) and VMware Player (a stripped down version of VMware Workstation)
To catch-up with the virtualization industry, Microsoft bought Connectix for its Virtual PC software. After acquisition, Microsoft lowered the price of Virtual PC and recently they announce they are giving for free Virtual PC 2004.
Parallels Workstation is a product from a new comer to virtualization scene. It is similar to VMware Workstation and Microsoft VirtualPC and until the former two producers reduce the prices, Parallels had also one of the cheapest solutions. Still they have the only solution that gives Apple users (on Intel processors) the ability to run Windows alongside Mac OS X.
Operating system level virtualization (VEs)
Virtualization at the OS level has been designed to provide isolation and security to run multiple applications or copies of the same OS on the same server. This requirement was determined by the fact that different operating systems are not required on the same server but only multiple instances of a single operation system. This kind of virtualization is performing better than previous one. SWsoft Virtuozzo is such a product for which proponents occasionally claim "thousands of virtual instances per server" in test situations to determine the upper limits of the technology (see Wikipedia).
The paravirtualization technique enables running different OSs on a single server, but requires them to be ported (compiled against a certain hypervisor layer). Xen is the most notable product of this type of virtualization.
Application level virtualization (VSPs)
This is the simplest form of virtualization, at application level. Altiris Software Virtualization Solution is placing applications and data into managed units called Virtual Software Packages allowing you to instantly activate, deactivate or reset applications and to completely avoid conflicts between applications, without altering the base Windows installation. A free version of this product can be downloaded from this site.
Note: A similar product called ( SoftGrid ) was developed by Softricity, now acquired by Microsoft.