Emulation refers to the capability to mimic a particular type of hardware for an operating system regardless of the underlying host operating system. For example, using an emulation virtualization solution, you can install a Sparc version of the Solaris operating system on a non-Sparc host computer. The emulation software runs as an application on the host system, but emulates an entire computer of another platform. The guest operating system has no awareness of its status as a guest operating system or that it is running in a foreign environment.
In some cases, hardware emulation can be painfully slow, but newer technology, updated emulation software and drivers, and faster 64-bit host processors make emulation a viable virtualization option—especially for those who need to develop drivers or technologies for other platforms without a large investment in support staff or hardware for them.
Bochs is a free, open source, Intel architecture x86 (32-bit) emulator that runs on UNIX and Linux, Windows, and Mac OS X, but only supports x86-based operating systems. Bochs is a very sophisticated piece of software and supports a wide range of hardware for emulating all x86 processors and x86_64 processor architecture. It also supports multiple processors but doesn't take full advantage of SMP at this time.
QEMU is another free, open source emulation program that runs on a limited number of host architectures (x86, x86_64, and PowerPC) but offers emulation for x86, x86_64, ARM, Sparc, PowerPC, MIPS, and m68k guest operating systems.
Microsoft Virtual PC and Virtual Server
Virtual PC is a free virtualization software package from Microsoft. Virtual PC uses emulation to provide its VM environment. These are good solutions for hosting a few VMs on a Windows XP Workstation or Windows 2003 Server. It isn't a large environment solution by any stretch of the imagination, but it can get some VMs up and running cheaply and in very short order.
VM performance on these products is surprisingly good for Windows VMs. It is difficult, if not impossible, to tell that you are using a VM when connecting over the network. Console performance tends to be a little sluggish at times—so whenever possible, minimize the console and use RDP to connect to your virtualized Windows systems.