Some site says: Server virtualization is the masking of server resources, including the number and identity of individual physical servers, processors, and operating systems, from server users. The server administrator uses a software application to divide one physical server into multiple isolated virtual environments. The virtual environments are sometimes called virtual private servers, but they are also known as partitions, guests, instances, containers or emulations.  

Server virtualization, also known as hardware virtualization, is a hot topic in the IT world because of the potential for serious economic benefits. Server virtualization enables multiple operating systems to run on a single physical machine as virtual machines (VMs). With server virtualization, you can consolidate workloads of underutilized server machines onto a smaller number of fully utilized machines. Fewer physical machines can lead to reduced costs through lower hardware, energy, and management overhead, plus the creation of a more dynamic IT infrastructure. To learn more about Microsoft and virtualization, please visit the Virtualization Web site, or the Virtualization TechCenter.

With Windows Server 2008, everything needed to support server virtualization is available as an integral feature of the operating system as Windows Server 2008 Hyper-V. With Hyper-V as a role, plus simple licensing policies, it's now easier than ever to take advantage of the cost savings of virtualization through Windows Server 2008:

Microsoft has reached another key milestone in the development of Hyper-V, with a feature-complete version now available for download as a release candidate (RC). You can download the update for Hyper-V RC here and experience the improved stability, usability and performance and also test the support for additional guest operating systems.

By: Kiran K