This has been the buzz word of the year, touching various platforms, hardware and applications although it has been in existence since 1960 during the mainframe era. In simple terms, it enables abstraction of any of the computing resources that can dynamically share each other across multiple environments and even remotely in a virtual infrastructure.
Operating System virtualisation enables multiple platforms in a single hosting environment. Application virtualization, hosts individual applications in different or even remote hardware/software and they are made accessible through a simpler interface from a range of devices including conventional desktops and smart phones.
By virtualisation there is high availability of resources, and the resource complexity is hidden for practical purposes. Performance is greatly enhanced with memory and storage virtualisation and so there is better utilisation, increased security, and improved disaster recovery facilities.
To learn more watch a virtualisation concept video from SUN Microsystems at http://preview.tinyurl.com/8wxdde.