Virtual machine can also refer to a way of running several OS (Operating System) es fully simultaneously on the same hardware. You use this feature often to test out new releases of your main OS, or to experiment with other OS es such as Linux, 64-bit versions or to test your software on older OS es such as Win2K and XP, or to run legacy software that only runs on older OSes (Operating Systems).
Microsoft provides free software called Virtual PC 2007 to do virtualisation. It even lets you drag and drop to copy files between different OS es running in different windows on your desktop.
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