I would only use the Microsoft Virtual Server and VMware server products in a lab, test scenario or low-load production environment. The advantages of these two products are their price (free) and relative ease of installation. The VMware Server offering is probably the easiest to deploy of the two because Microsoft Virtual Server requires an IIS server.
The VMware Virtual Infrastructure 3 (VI3) product is VMware's Enterprise-Class suite of virtualization products, including ESX Server and Virtual Center. If you are serious about server virtualization and want to go with a well-established, mature product from a well known company, then you should be looking at VMWare's VI3. The initial cost of deploying VI3 in any serious manner can be more expensive than other offerings. But features like the ability to move running VM's between ESX Servers and snapshot backups of VM's may make the admission price well worth it.
Xensource is the commercial provider of Xen, an open-source virtualization platform. Depending on your political views on software, the fact that Xen is open-source may be enough of a benefit. Xen also has less overhead than some of the other solutions because it uses paravirtualization. This method requires that the guest operating system be modified, unless hardware-assisted virtualization or "native virtualization," such as AMD Pacifica or Intel VT is used. That means you cannot run a Windows guest on Xen without hardware-assisted virtualization.
Those are the three big players right now. Some companies to watch out for on the horizon may be Virtual Iron and Virtuozzo with their own unique takes on server virtualization.
As with any technology deployment decision, you must carefully consider the ROI in terms of deployment time, training, and ease of supporting the new infrastructure.
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