I’ve started playing with a new virtualization alternative, Virtual Box (http://www.virtualbox.org/ ). It’s an open source alternative to other virtual machine programs like VMWare or Microsoft’s Virtual PC. It runs on both Windows and several flavors of Linux, and has guest additions for Windows and Linux. It also has USB support, a feature lacking in Microsoft’s product.
I found the user interface very intuitive. Simply clicking New brings up a wizard and walks you through the steps to setup a new machine.
You can choose to use a physical CD/DVD or mount one off of an ISO file, access hard disk info, audio, etc all by clicking on the blue links you see above.
As an initial test I downloaded Damn Small Linux (http://www.damnsmalllinux.org/ ) as a ISO file, and ran it in “Live” version as a mounted image. I only gave it a quick run, but so far it seems to work OK. I plan further testing with XP as a test image, but would be interested in seeing comments with your experiences.