I've tried a few options such as ESXi, but if I remember correctly, it complained about my CPU not having support for virtual machines (it is an Atom after all).
Also there's another caveat, the server OS (Debian Linux) currently runs off a USB flash drive with an eSATA hard drive for storage. Is it advisable to install a virtual server on a USB stick? This is only for fun, after all. Obviously the virtual machines themselves would be on the eSATA hard drive.
I think I also tried VMware Server 2, but this also complained about lack of virtual support on my CPU (or am I remembering incorrectly?).
I'm also considering LVS and Linux-VServer, but I tried those in the past and got nowhere fast; not because of hardware issues, but because it seemed very involved and I wasn't really sure if it was the right platform.
Update: I should also add that the machine is headless.
Best Answer
For a light-weight virtualisation solution, you really should look at VServer and OpenVZ. None of the other solutions are quite as light-weight.
You can run things off the USB as long as you take a few precautions (due to write wearing). You should ensure that your
/tmp/and/var/directories are mounted on a proper write-able partition. These two directories get trashed quite a bit and it will cause your flash disk to die sooner.