There is also a concept of bare-metal hypervisor which is offered by VMWare and Citrix. VMWare's offering in your case would be VMWare ESXi or Citrix XenServer. When you install either of these, you are turning the entire machine into just a system that runs virtual machines. This means there is no host computer, just a small footprint that runs the VMs and can be controlled over the network. A pool is created to store the data of these machines that is different from what you would consider a typical operating system Setting up ESXi or XenServer is problematic and annoying for a lot of people, but it has its advantage - no host operating system.
They won't necessarily run "as fast", but will be close depending on the hardware.
Here is the trickiest question of them all, the one that is going to make or break this project of yours. Microsoft offers Hyper-V for Windows Server 2008, and also offers Microsoft Hyper-V Server 2008 as a standalone product. Microsoft also offers Virtual PC, which in comparison to VMWare's stuff doesn't even come close, in my professional opinion. You are paying a big markup on VMWare's virtualization products for a reason: they are getting better and better and close enough that with the right processor(s) and enough RAM, you are approaching the same standards as the host. This is just the honest rundown. Microsoft just isn't there yet with the virtualization.
SBS doesn't have Hyper-V as a Server Role, as far as I know. So this will become out of the question for you. VMWare doesn't recommend running Workstation under Windows Server, but it will work. They recommend using a workstation. If this is for SUPPORT, you will want to use Workstation, and just interact with these operating systems on a desktop, correct? There are some major issues running Microsoft's virtualization products with non-Microsoft operating systems like Linux. But there are few to no issues with VMWare.
With VMWare Workstation it doesn't really matter. You may want to consider setting up a machine just for virtual machines. If this is for traditional desktop interaction, with support for snapshots, development, or quality assurance, go with VMWare Workstation on a host computer such as Windows 7. VMWare Workstation targets the largest possible market-share with this product, and that is Windows users.
The answer would be yes, absolutely, if you are using VMWare Workstation, it is the best for your situation. I am assuming (and I hate to assume too much) that your environment for these systems is going to be issues like quality assurance for your clients, testing, and so forth.
Here is my recommendation:
You need to separate Windows Server SBS as a separate project. It is too important to your business to screw around with by having virtual machines on it, in my honest opinion. Use a dedicated system for the SBS server for your office, and get the best leverage from it by just keeping it Windows Server SBS. You can't run Microsoft's hypervisor off SBS anyway.
Set up a separate machine, preferably one with 8-12GB DDR3 memory, a quad-core processor, and 3 separate hard drives installed, or SSDs, to run Vista, XP, and Linux. Use this as your "virtualization machine". Now you are saving on 3 systems right here. I don't know what type of work you are doing, but I'm guessing youre just using these OS's to support your different clientele. In this instance, you want the flexibility of Workstation, and not the rigid sort of demands of a bare-metal hypervisor. Bare-metal hypervisor's are used for things like Virtual Private Servers in web hosting and so forth. This does not read as what you are trying to do.
There are a lot of reasons not to run Windows SBS Server as a virtual machine. There are also a lot of pros. But because you will need to make use of bridged networking to make the connections to the LAN possible, you want to have the Windows Server as a real-deal dedicated server. Similarly, you may want your "virtual machine" system running under Workstation as something that is accessible to you, and plainly easy for enough for you to configure, for client support.
If I knew more about your business I could try to give you more tips in this regard, as I have had my share of time dealing with a great deal of this technology. In general I have started leaning away from bare-metal hypervisors that turn the entire machine into a virtual machine-store because of the ease of use of VMWare Workstation and what I use it for: software evaluation, testing, tutorials, support, and demos. I accomplish this on my end with a single Intel Core i7 with 12GB DDR3 and 4 Crucial solid state hard drives in a RAID-0. But to cut costs you may want to look at using standard drives with each VM on a separate drive. Resource consumption will be your biggest challenge, but you can still save money on hardware (and space) using similar methodology.
