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...... Yes, this seems like a case where virtualisation is a good solution. I've only just started learning to run Xen myself, but the advantages of virtualisation over dual/triple booting etc are pretty clear. As well as the ones you mention, different machines can also be run concurrently and networked. ......
FWIW, my job consists primarily of writing tools to support various cluster infrastructures and I rely pretty heavily on virtualization to test my code. I regularly run 5 machines in a single instance to test my stuff. Currently I use VMWare Workstation (the "team" support is a good fit for me, I can add and remove nodes to various clusters using this, easily).
I can these systems in 5GB of RAM but the networking between nodes is a bit slow. It is only noticeable when moving medium-large datasets (+1GB) around.
-geoff