I've been a huge fan of virtualization over the years. Its definitely the best way to maximize any workstation or server environment. I've always used VMware workstation on my desktop to test and demo software...and its especially great for demoing Linux environments on windows. I also heavily utilized virtualization on my Windows 2003 servers...so for the past year or so, i've been running Microsoft's free virtual server technology, Virtual Server 2005, to run additional web, mail, and database servers on my network. But, since the arrival of the first VMware server RC, I've been using a mixed virtual environment. Some servers are running VS 2005 R2 and some are running VMware server 1.0. The reason for this was to basically see how both tech's stood up to one another when it comes to management, deployment, performance.
On the management side, both offer excellent (and free) tools for managing the various virtual machines on a particular server...though, each take a slightly different approach. VS 2005's server/machine management is entirely web based (including remote control), with the exception of a very basic, remote desktop like client, that can directly connect to vm from your desktop. VMware also has a web based app, but it can only be used for monitoring the server/machines and changing some basic options. For complete management, its best to used the virtual console provided with the server install. The console is nearly identical to the vmware workstation interface, which allows you to manage multiple virtual machines at the same time as well as all of the available server settings. For me, the overall winner so far, is VMware. The desktop management interface is really in a different league from anything Microsoft currently offers with VS 2005. Though, I will say that VS 2005 has one significant option that stands out when running multiple vm's...In the web management there are a series of settings that allow you to set processor utilization caps and percentage base processor priorities on a server or machine wide basis. Now that is something that VMware server should have definitely included in this release, though the support for multiple virtual processors makes up for it, for the time being.
With deployment, neither one really stands out as far as functionality. Meaning, that I belive both do well at this by supporting the concept of Virtual Appliances. Virtual Appliance is a term make popular by VMware that basically describes a virtual machine which is ready to go with little to no configuration after startup. Now, technically, VS 2005 doesn't have tools to specifically support this concept, though Virtual PC 2004 can be used with a few exceptions or you can just create a new virtual machine description on the server and attach an existing (cloned) disk to it, which already has the server os installed and configured. With VMware, there is a more integrated approach to creating and viewing virtual appliances. The recommended approach is to create them using VMware Workstation and then simply deploy (copy) the vm/appliance to its hosted location. If you don't have workstation installed, then you would just use the Virtual Console to accomplish the same thing. VMware also has an excellent free app called VMware player, which allows you to view and interact with appliances on the desktop. So, on the free side of things, both are pretty even...though, once you jump in to the realm of paid deployment tools, VMware currently has VS 2005 beat. With their newly available Virtual Center 1.4 product for Virtual server 1.0, which allows the centralization of management and deployment across the network. Though, to be fair, MS has announced the upcoming beta of System Center, which will be direct competition for Virtual Center in late 2007.
Finally, the preformance comparison between VMware Server and VS 2005 is really too close to declare a winner (in single proc mode)...Now, that definitely wasn't the case during the VMware server beta, but now that 1.0 is out, the performance is very solid and up to par with VS 2005 on both the server and management side.
So, with ALL of that said. I will most likely phase out the rest of my VS 2005 vm's and import them into VMware format in the near future. Though both servers are very close in comparison, VMware still came out on top, showing that their still the best at what they do...and now that there stuff is (mostly) free, there's really no reason to for me use any other tech. Now, if they would just release a version of VMware workstation for free ;)