Microsoft released the latest version of their Virtual PC product.

Microsoft Virtual PC 2007

It is a free download that runs under any 32- or 64-bit version of Windows (XP or Vista) except for Windows XP Home Edition. It lets you run other versions of Windows, DOS, Linux, and many other operating systems as a Guest OS at the same time Windows XP or Windows Vista is running. I use it a lot to test Linux and Windows Server projects. Virtual Machines built using Virtual PC can be copied directly to a server running Microsoft Virtual Server 2005 R2. I've been known to build a test server in a virtual machine on my notebook during long meetings and then pop it onto my server for further testing later on.

You can find a brief video demo of the old LEGO Loco game running on a Windows 98 Virtual Machine inside of Virtual PC 2007 on the O'Reilly Inside Port 25 site where I contribute blogs a couple of times a week.