Screaming Penguin - Source Does Matter

VMWare, VirtualPC and Bochs all make machine emulators that can run on various OSes. OSNews has a review of these players. The only one of these I have ever used is VMWare.

VMWare is great, and gets the nod in most categories of the review. Its not free, and not really cheap, but it works very well. VMWare allows you to create virtual machines on your existing OS that have their own BIOS and then bootup and install whatever OS you want on that "vm."

I have used VMWare most often with Linux as a host OS and then running Win2K in a "vm" window. This is for items like MSProject, Outlook calendaring, etc, where Linux is the machine of choice for 98% of activities but Windows is still required for the environment. Note that it works the other way as well. You can run Windows and put Linux on a vm. For that matter you can put whatever you want.

With each vm you allocate physical memory and diskspace. Each vm then has its own network settings, etc. I have seen VMWare used to emulate an entire network of machines and test applications and cross compatibility (one machine with 8 vms running various OS platforms.)

For more on the other two and the complete review check the linked OSNews article.   Review: VMWare Workstation 3.1 vs Virtual PC 4.3.2 vs Bochs 1.4