I use virtualization stuff extensively at work. We run about 150 boxes virtually in production as well as test and development. All of our virtualization stuff is using VMWare's ESX products, or ESXi.
I have tried using Hyper-V, and even bought a book on Hyper-V to try to come to grips with it and compared to VMWare's offerings, I just don't care for it at all. The administration is a nightmare when you have workstations and servers in mixed domains, or some in workgroups and some on the domain.
At work, I have a few desktop type machines which I use for testing. With a dual core or quad core processor and 8GB of RAM...I have no problems running 3-4 concurrent virtual machines and still getting very good performance across all of the VM's and the host computer itself.
VMware has a smattering of virtualization products. Many of which are free...but not necessarily "gimped" as you suggested...just suited for different types of people. I'll highlight the main points of each one
- vmware server 2.0. It's free and runs on a Windows system or Linux system. It's meant to be more of an enterprise or server based appication. It runs as a service, so you can log out of your computer and the VM's still run. However, it runs on-top of a fully running operating system...so performance while good isn't as good as it can be with a hypervisor based product
- vmware-player 3.x. It's free and runs on a Windows system or Linux system. It's a client side workstation application...so you cannot log out of your session without shutting down the VM's. In the past, player could only playback machines...but with the 3.x release it can create them as well. It supports advanced graphics stuff like AERO. However, it doesn't support creating snapshots of running VM's and it's network choices are more simplistic than VMWare Workstation. Again it runs on-top of a host operating system, so performance less stellar than hypervisor based product.
- VMWare Workstation: This is around $180. It's a workstation based product...This supports snapshotting and far more networking options than the VMWare Player application. Again it runs on-top of a host operating system, so performance less stellar than hypervisor based product.
- VMware ESXi : This is free. It's a hypervisor product...which means that it runs as it's own operating system...thus there is no Windows or Linux host already running on the machine. It has a very small install footprint and utilizes hardware extremely well. You do have to manage the guests and the configuration of them from another machine on the networking using the free vsphere client. It has tons of hardware options and is pretty much fully functional....but there is a catch. The advanced functionality features like DRS (dynamic resource scheduling) and vmotion (automatic failover of VM's to another ESXi box) require the purchase of a vCenter Server and associated licenses for the ESXi boxes themselves. And these licenses aren't cheap ($1,000 to $15,000). Of course, in all fairness.....these advanced features also require things like shared storage and such to function....and these are often expensive solutions themselves. Be advised that you need to make sure that the hardware that you want to use must be on the approved hardware list.. This product works great on servers and with certain chipsets, storage drivers and network drivers for some consumer based mobos. There are whitelist guides which will help you buy the right parts to assemble a desktop style machine capable of running ESXi 4.0. And one great tidbit, is that when you first install this product...you get 60 days of eval mode which enables all advanced functionality (of course you will have to also setup a vcenter server eval as well..which is free for 60 days to control that advanced functionality). So, you can see everything that VMware has to offer for free...and you could rebuild your test environment every 60 days if you were so inclined.
- VMWare Vsphere (ESX). This is the non-free version of ESXi. It's the older system where VMWare loaded a hypervisor that was more of a fully functional Linux server after install. It comes by default with the licensing features and such which provide the advanced functionality...but immediately comes with a $5,000-$15,000+ cost up front just to get started.
Note: VMWare is really moving towards customers using ESXi as the hypervisors and just licensing vCenter Server and getting the associated advanced functionality licenses. The reason: ESXi is a smaller installed footprint, is not as much as a fully functional server...so it's smaller, faster and has less to patch and secure.
For my test lab at work, my workstation is custom built with ESXi friendly hardware and runs ESXi 4.0. It connects to local hard drives within the host, as well as shared storage being provided by another desktop via iSCSI and running OpenFiler.
For my actual workstation machine....I run Windows 7 on the host and VMWare Player 3.1 for my own personal testing and experimentation. This product has proved more than sufficient enough for everything that I have ever thrown at it. I evaluated the VMWare Workstation product...but couldn't justify the cost of the product for any of it's features...as they are not needed for the types of things that I do on this test machine.
At home, I used to use VirtualBox...but switched to VMWare when VMWare Player 3.x came out. For me, it's the ability to import the free XP Mode image, ability to run Aero, and the Unity mode which sealed the deal. Plus, since I'm so VMWare centric at work, it just made sense to use the same type of thing at work and keep consistency.