Most distributions released since late 2006 have supported some form of virtualization. Intially the support was for Xen and has recently begun changing to KVM.
Using Ubuntu 7.04 as the baseline, what can we get?
These instructions are consolidated from the Ubuntu Wiki KVM HOWTO.
grep vmx /proc/cpuinfo
sudo modprobe kvm-intel
qemu-img create edgy.img -f qcow 6G
sudo kvm -m 256 -cdrom ~/ubuntu-6.06-server-i386.iso -boot d edgy.img
auto lo eth0 br0
iface lo inet loopback
iface br0 inet dhcp
bridge_ports eth0
bridge_maxwait 2
up /sbin/ifconfig eth0 inet 0.0.0.0 promisc
iface eth0 inet static
address 172.16.5.0
netmask 255.255.255.0
sudo /etc/init.d/networking restart
sudo kvm -m 256 -net nic -net tap \
-cdrom ~/mini.iso -boot d edgy.img
There are all types of virtual hosting today. It started out with UML or jail type hosting and gradually progressed through all the virtualization technologies. Today you can find very sophisticated cluster based hosting providers. Particularly interesting is 3tera and Amazon's EC2 for their dynamic provisioning and flexibility. RailsMachine is noteworthy for it's utilization of Xen to solve the Rails deployment problem.