Virtualization is a framework or methodology of dividing the resources of a computer into multiple execution environments. As a perceived "hot term", virtualization has been claimed by IT marketers to refer to everything from virtual machines to systems management software, so as to become nearly meaningless.
Types of Virtualization
Some common applications of virtualization are listed below; this list reflects the extreme diversity that the term has come to encapsulate.
A software emulator allows computer programs to run on a platform (computer architecture and/or operating system) other than the one for which they were originally written. Unlike simulation, which only attempts to reproduce a program's behavior, emulation attempts to model to various degrees the state of the device being emulated. The virtual machine simulates the complete hardware, allowing an unmodified OS for a completely different CPU to be run. This is also known as Dynamic Recompilation.
Paravirtualization is a virtualization technique that presents a software interface to virtual machines that is similar but not identical to that of the underlying hardware. This requires operating systems to be explicitly ported to run on top of the virtual machine monitor (VMM) but may enable the VMM itself to be simpler and for the virtual machines that run on it to achieve higher performance.
Native virtualization is a virtualization technique where the virtual machine only partially simulates enough hardware to allow an unmodified Operating System to be run in isolation, but the guest Operating System must be designed for the same type of CPU.
Operating System-Level Virtualization
Operating System-level Virtualization is a server virtualization technology which virtualizes servers on a operating system (kernel) layer. It can be thought of as partitioning a single physical server into multiple small computational partitions. Each such partition looks and feels like a real server, from the point of view of its owner. On Unix systems, this technology can be thought of as an advanced extension of the standard chroot mechanism.
The Linux-VServer approach
At a basic level, a Linux server consists of three building blocks: hardware, kernel and applications. The hardware usually depends on the provider or system maintainer, and, while it has a big influence on the overall performance, it cannot be changed that easily, and will likely differ from one setup to another.
The main purpose of the kernel is to build an abstraction layer on top of the hardware to allow processes (applications) to work with and operate on resources (data) without knowing the details of the underlying hardware. Ideally, those processes would be completely hardware agnostic, by being written in an interpreted language and therefore not requiring any hardware-specific knowledge.
Given that a system has enough resources to drive ten times the number of applications a single Linux server would usually require, why not put ten servers on that box, which will then share the available resources in an efficient manner?
Most server applications (e.g. httpd) will assume that it is the only application providing a particular service, and usually will also assume a certain filesystem layout and environment. This dictates that similar or identical services running on the same physical server, but for example, only differing in their addresses, have to be coordinated. This typically requires a great deal of administrative work which can lead to reduced system stability and security.
The basic concept of the Linux-VServer solution is to separate the user-space environment into distinct units (sometimes called Virtual Private Servers) in such a way that each VPS looks and feels like a real server to the processes contained within.
Although different Linux distributions use (sometimes heavily) patched kernels to provide special support for unusual hardware or extra functionality, most Linux distributions are not tied to a special kernel.
Linux-VServer uses this fact to allow several distributions, to be run simultaneously on a single, shared kernel, without direct access to the hardware, and share the resources in a very efficient way.
That said, you may have already figured out that Linux-VServer uses Operating System-level virtualization ;-)