How do you use a VM to test out apps?

How specifically does a VM work? – Does it create it’s own copy of the registry?

How do you set up and use a virtual machine to test an app. and get rid of it when you are done?

Is there a way to save files in a mutually accessible folder so that they are accessible in case you decide to install the file later as a resident app.?

Are there any websites that provide this kind of info? I may be using ineffective search criteria.

Thanks,
Anna