How does virtualization software work

Application testing in multiple environments is one obvious use of virtualization that I'm aware of. Testing your application on other operating systems (without requiring additional physical computers to do so), as well as testing that involves software that generally only allows you to install a single version on a given machine (such as the Internet Explorer browser; running both IE6 and IE7 on the same machine is not an officially supported configuration), are good candidates for virtual machine usage.

I just built a real beefy machine at home so that I could run multiple VMs at once. My case is probably extreme though, but here is my logic for doing so.

Testing

When I test, particularly a desktop app, I typically create multiple VMs, one for each platform that my software should run on (Windows 2000/XP/Vista etc). If 32 and 64 bit flavors are available, I also build one of each. I also play with the VM hardware settings (e.g. lots of RAM, little RAM, 1 core, 2 core, etc). I found plenty of little bugs this way, that definitely would have made it into the wild had I not used this approach.

This approach also makes it easy to play with different software scenarios (what happens if the user installing the program doesn't have .NET 3.5 sp1? What happens if he doesn't have XXX component? etc?

Development

When I develop, I have one VM running my database servers (SQL2000/2005/2008). This is for two reasons. First, it is more realistic. In a production environment your app is probably not running on the same box as the db. Why not replicate it when you develop? Also, when I'm not developing (remember this is also my home machine), do I really need to have all of those database services running? Yes, I could turn them on and off manually, but its so much easier to switch a VM on.

Clients

If I want to show a client some web work I've done, I can put just a single VM into the DMZ and he can log into the VM and play with the web project, while the rest of my network/computer is safe.

Compatibility

Vista64 is now my main machine. Any older hardware/software I own will not play nicely with that OS. My solutions is to have Windows XP 32 as a VM for all of those items.