How to create virtual machine environments?

How to create virtual machine environments? I want to create a number of virtual machine environments for testing new beta releases - Windows 7, VS2010, Windows Server 2008 and so on. My host OS is Windows XP. What is the best way of going about this?
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bert [Entry]

"If you want a free solution, download Virtual PC 2007.

Install it and then it should be straight forward - You treat each and every virtual machine as its own physical computer, so put in the CD/DVD or mount the ISO (or mount the VHD) and away you go.

If you don't mind paying, I highly recommend VMware Workstation, at the end of the day, you will be able to accomplish the same, but Workstation has so many features (such as snapshots) that I just could not do without."