Lee's Favorite Apps: VirtualBox
On a single XP Pro desktop, I've got Windows 98, 2000, Vista, Server 2003, and Ubuntu virtual machines at the ready. Giant hard drives are cheap, ram is cheap, and my CPU has plenty of juice to do a little virtualization.
I find VirtualBox a little less confusing and just about as powerful as VMWare. It has all the functionality I'm looking for anyways, and it's totally free. It would be nice if the SATA controller and RDP support were included in the Open Source edition, but that's not problematic since I'm not using VirtualBox for enterprise-grade situations.
Because VirtualBox operating system installs are damn near as responsive as your real OS, it's an awesome way to fix one giant issue with some new laptops. Several companies don't bother with XP drivers on some of their laptop models which can make downgrading a royal pain in the ass. Leave Vista in place, decrapify it, and then do your XP install in a virtual machine.
No driver issues to worry about, and all you've really got to teach someone is how to launch VirtualBox, start the machine, and how to use the hotkeys. It amounts to about 5 lines of instructions, and I've guided some pretty technologically challenged individuals through it without any trouble.
I also love that it's open source, modular, cross-platform, and that Sun gets a little loose on their screenshots page, declaring that "Damn Small Linux runs damn well" in VirtualBox.