Just some info:

I think that the deciding factor of which way to go depends on how much money you are willing to spend and the amount of time that you want to invest in setting this system up and maintaining it. I personally have some of all three of the previously mentioned vitalization technologies running on our network (Solaris Zones, Parallels, XEN, and VMWare), and each take different amount of these resources to setup and maintain.

Solaris Zones are probably one of the coolest solutions. It allows you to allocate system resources across zones without having to reinstall anything or duplicate configs. Setting up zones is not the hardest thing to do, but one of the most robust; if you are one of the types of people that has to know every angle of something before using it, this is probably not the way to go.

XEN is not that hard to setup, but you are limited on the types of OS's that you can install. There has been a lot of information floating around about XEN lately, and if you are looking for more information about setting it up, I would look at the last two SysAdmin issues on Security and Open Source (I think that there was about 2 or 3 articles).

VMWare is expensive if you are looking for and ESX type solution. If you were thinking about setting up workstation, good luck getting those things to come up at boot. :)

Parallels is just like VMWare but for Mac, and it does not sound like you are a Mac user, or have any hardware laying around to even consider this solution.

Just my opinion, and my experience.

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Thx
Joshua Gimer