Is there anyway I can set up an extra Monitor as a virtual machine?

You need a second computer to do that.

Hello kreativedesines Welcome to the Seven Forums!

I think you will find you would need to build an extra case to work with the cordless keyboard and mouse setup there in order to be independent. With two keyboard and two mice one set wireless both will still be working with the same program on the same desktop and conflict when two users were both on at the same time. Even when having a VM open on one screen the clash of controllers would be evident unless you can isolate the access of each keyboard and mouse by how things are configured.

That's where one option is available to see two separate sets of cotrollers used by two people on two separate OSs calls up the need for VMWare. This requires configuring the Guest OS to use one keyboard and one mouse while the Host OS has control over the main OS with the other keyboard and mouse. An older Vista reference found at Tom's Hardware provides some insight on this type of setup. Two Users on One Computer: TUTORIAL! [Simplified]

There are a few other similar guides to find on other sites as well. Another program called Userful Multiseat that allows upto 20 users on one pc but sees a network set up as part of the process rather then running a VM for a guest OS install.

You wouldn't be the first to ask about how this is done however. You may want to look over another thread on a similar idea seen at Multiple simultaneous users on one Windows computer?

Small businesses do this all the time, in a way. They might have one PC (server) and some others (work stations), but all use the server at once. you may try a post in our networking section to see if someone has a solution.

Look into an Android based mini-PC that is not much bigger than a USB thumb drive that plugs into a an HDMI port on a TV and gives you a working PC. Add a Bluetooth mouse and keyboard and you're good to go. It will also double as an HTPC to play movies and stuff thru the TV.

Here's an example: Amazon.com: Android 4.0 Mini PC: Computers & Accessories

Raspberry Pi too maybe. Amazon.com: Raspberry Pi: Electronics

It depends what type of games as well as the OS you are planning to run them on. Android and other portables wouldn't be running Guild Wars or some other 1st person shooter that requires a good video card and some memory. For simply browsing the web and checking the main you wouldn't need to worry too much for a fast check of your inbox on the other hand.

if im playing games on my main screen, someone else can be watching movies or surfing the web on the bunk bed screen.

That kind of sums up the lack of need for anything demanding as far as basic viewing while lying around on the bunk bed. A micro atx mini tower with the basics can still provide enough to watch flicks and tend to some surfer without issues. The links posted earlier however tend to outline what you would need for a one pc setup supporting multiple users.

Night Hawk said:

...

if im playing games on my main screen, someone else can be watching movies or surfing the web on the bunk bed screen.

That kind of sums up the lack of need for anything demanding as far as basic viewing while lying around on the bunk bed. A micro atx mini tower with the basics can still provide enough to watch flicks and tend to some surfer without issues. ...

For the stated uses of watching movies or surfing the web a micro atx mini tower would be much more expensive (and overkill) than something like the Android device I suggested. I could see going that route if the OP wanted the 2nd user to be able to play games while he played games on his main computer but that isn't what he asked about.

Britton30 said:

Raspberry Pi too maybe. Amazon.com: Raspberry Pi: Electronics

The Raspberry Pi would also work. I have both a Raspberry Pi and an Android mini-PC and like the mini-PC much better. IMO, the Raspberry Pi is too slow to do anything really useful except be a learning device for school kids (what it was designed for). I have one of the earlier ones with only 256M of RAM while the newer ones have 512M of RAM so it's possible the newer ones have better performance.