What is a Virtual Machine, and how can I create a Virtual Machine?
Virtual Machines allow you to have many computers and Operating Systems that are all one the once physical device. Virtual Machines appear like they are on its own hardware, but they share the host devices hardware with other Virtual Machines.
Virtual Machines seem to be the way forward in Data Centers as you can utalise more computer resources, and save space, and you can create new servers at the click of the button without having to go into a Data Center to install new hardware.
Most enterprises using VMWare for virtualisations http://www.vmware.com/, but there are many available.
On a more consumer level, you can download Virtual Box, which is free and open source from https://www.virtualbox.org/.
Virtual Box simply installs on your Operating System, such as Windows 7 and you can create a Virtual Disk which you install any other Operating System you want, such as Windows XP, another copy of Windows 7, or a Linux distribution.