To be crystal clear: Microsoft Virtual Server is NOT Windows Server virtualization.

You should not think to Windows Server virtualization as the next version of Virtual Server. It is not. The next version of Virtual Server R2 is Virtual Server R2 SP1. Virtual Server is a standalone software product. Like SQL, Exchange, or any of our other server software, you purchase and install it on a Server OS (or XP for non-production use). Yes, Virtual Server is now free, but that doesn’t change the fact that it’s a product.

Windows Server virtualization is a feature of Longhorn Server x64 Editions. It is not a standalone product and it will not be backported to Windows Server 2003. 

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Windows Server Virtualization System Requirements

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Windows Server virtualization has the following system requirements:

1. Longhorn Server x64 Edition AND
2. System with hardware assisted virtualization (either Intel VT or AMDV formerly Pacifica)

To be explicit, Windows Server virtualization will NOT run on:

• Vista
• Longhorn Server 32-bit (x86) or Itanium (IA-64) versions
• Systems that don’t have VT or AMDV (Pacifica)

PLEASE: If you’re purchasing hardware, it's HIGHLY RECOMMENDED you make sure it has VT or AMDV. Intel has been shipping VT hardware for a few months now and AMD just started shipping their AMDV systems.

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High Level Differences Between VS and WSV

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There are numerous differences between Virtual Server and Windows Server virtualization. Here are the important high level differences.