Virtualization provides organizations more bang for their buck, an excellent ROI. There is no argument about it. It has spread like a virus, organizations are virtualizating their systems without regard for security.

The main component in any kind of virtualization is the hypervisor, it is an environment the virualized system thinks is the bare metal machine. There can be three types of hypervisors:

Type 1: Do not need an OS to run on, install on a system like a conventional OS
Type 2: Need an OS to run on, install like another application on currently installed OS

Top three ways to virtualize

Virtualization style: Operating system (OS) container emulation
Examples: Solaris Containers; SWsoft/Parallels
Pros: Efficient; does not require additional software
Cons: Isolation; dependent upon OS; limits version choice within guest OS types

Virtualization style: Hardware emulation
Examples: VMware Server; Microsoft Virtual Server
Pros: Relatively easy to install and use; true isolation of OS instances
Cons: Less efficient than paravirtualization

Virtualization style: Paravirtualization
Examples: Xen, VMware ESX, Microsoft Longhorn virtualization
Pros: High herformance; true Isolation of OS instances
Cons: Extra software layer; complex to install and administer

Hypervisors

VMware Server (Formerly VMware GSX Server)
VMware Workstation
VMware ESX Server
VMware ESXi
Xen from Citrix (Also has an opensource version)
Virtual Box from Sun Microsystems (Also has an opensource version)
U3 Technology from SANdisk