A hypervisor is a bare metal approach to virtualization. Bare metal refers to the server system hardware without any OS or other software installed on it. The best way to describe hypervisor technology is to draw a comparison between it and hosted virtualization. At first glance, the hypervisor seems similar to hosted virtualization, but it is significantly different.
A hypervisor is virtualization software that runs an operating system. Conversely, hosted virtualization utilizes an operating system and runs virtualization software as an application. The hypervisor software is installed to the bare metal; then the operating system is installed, which is itself, a paravirtualized VM. The host operating system, if you can call it that, is designated as VM zero.
A new product, VMware ESXi, implements a bare metal hypervisor without a traditional operating system interface. It installs directly to the hardware in an almost impossibly small 32MB footprint. ESXi must be installed onto hardware that is virtualization optimized. VM management is performed via Direct Console User Interface (DCUI), which is the low-level configuration and management interface performed at the physical console of the server system. The VMkernel allows for remote management via a set of APIs and agents.
Xen versions 3.0 and earlier weren't particularly interesting to me because they were somewhat difficult to use and didn't seem to perform all that well for my specific applications. Xen 4.x products, however, have converted me heart and soul. The graphical interface is intuitive, fast, and extremely well thought out. The template engine in the new product is a pleasure to use, and provisioning a new VM with it is fast, fast, fast. If you have a need for high-end virtualization, you must check it out.
VMware ESX/VMware ESXi
Enterprise virtualization at its finest is brought to you by the people who breathed life into PC-based virtualization. ESX is a mature product that is rivaled only by Xen at this level of virtualization. Both products require 64-bit architecture, but ESXi has very special hardware requirements beyond those of ESX. ESXi is now a free product.
Microsoft steps up to the plate with its Windows 2008 Server family and Hyper-V virtualization solution where Citrix and VMware fall short: a Windows-based Enterprise virtualization product. Both Citrix Xen and VMware are Linux-based, which means that if you aren't familiar with Linux or UNIX commands, you may be better off using the Microsoft product.
This product, when more mature, promises to be a formidable challenge to VMware's and Xen's dominance in the Enterprise virtualization world