Over the last few years (in large part fueled by powerful, inexpensive CPUs and cheap RAM), virtual machines (VMs) have become critical for developers to test their applications. A few major contenders have emerged in the market. VMware still seems like the king to beat, but the company is facing pressure from Microsoft and others.
I tend to use Microsoft Virtual PC 2007 since it is easy to deal with, but I have been shifting to using Hyper-V on a Windows 2008 server. I am not 100% happy with either choice because of the lack of features, but both products are clean and get the job done.
J.JaDisclosure of Justin's industry affiliations: Justin James has a working arrangement with Microsoft to write an article for MSDN Magazine. He also has a contract with Spiceworks to write product buying guides.
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Justin James is the Lead Architect for Conigent.