VirtualBox is a family of powerful x86 virtualization products for enterprise as well as home use. Not only is VirtualBox an extremely feature rich, high performance product for enterprise customers, it is also the only professional solution that is freely available as Open Source Software under the terms of the GNU General Public License (GPL). 

http://www.virtualbox.org/wiki/VirtualBox

http://www.virtualbox.org/download/1.6.0/UserManual.pdf

Presently, VirtualBox runs on Windows, Linux, Macintosh and OpenSolaris hosts and supports a large number of guest operating systems including but not limited to Windows (NT 4.0, 2000, XP, Server 2003, Vista), DOS/Windows 3.x, Linux (2.4 and 2.6), and OpenBSD.

Current version is 1.6, current version available from the Ubuntu Repositories: 1.5.6 (recommended)

Installing:

VirtualBox appears in the Add and Remove Programs in Ubuntu, but for reasons that I can't understand installing it from there is not enough, the virtual machines won't start, so follow me to a fool proof installation that I've used a couple of times now in Ubuntu 7.04, 7.10 and 8.04

1. Open Synaptic Package Manager (System --> Administration --> Synaptic Package Manager)

2. Search for "VirtualBox" (don't include the quotes)

3. In the list select virtualbox-ose, virtualbox-ose-modules-generic (there are GUEST modules, you want modules NOT guest-modules)

4. Click Apply.

   • If you prefer the mighty console: $ sudo apt-get install virtualbox-ose virtualbox-ose-modules-generic

5. Now open Users and Groups (System --> Administration --> Users and Groups)

6. If you have Ubuntu 8.04 you will have to hit "Unlock" first, then select Manage groups.

7. Find vboxusers in the list, and click"Properties"

8. Check the box next to your username and then click OK, Close and Close

9. Log out and then Log in and voila, VirtuaBox should work.

Now lets create a virtual machine and install Potato XP (Potato Vistoso is so bad that I wont bother installing it http://badvista.org) in it...oops did I say Potato? sorry Microsoft Windows XP :)

Please don't use this guide to install counterfeit copies of windows... Billy Gates doesn't like it... The Potato license says... somewhere that it should be installed only once... so if you are going to install Windows XP in the Virtual Machine it cant be installed anywhere else... that said... lets begin.

1. In VirtualBox's main window, select "New", you will get a "wizard", it's pretty easy to follow.

2. Read (if you want) the intro and click next, you will be asked for a name for the machine and the OS (operating system) that you will install. Name it whatever you want and select Windows XP from the drop down below.

3. Next is going to ask for RAM, well... we can have an argument about how much RAM is better, it really depends on how much do you have, never give more than half of the ram to the virtual machine because you are going to feel it in performance. 192 in the minimum. Windows XP works well with 256 or +. I have 2GB of RAM so I am giving it 512.

4. Next, the Hard Disk, click New...

   • Dynamic vs Static. It depends on how much space you have in your harddrive. Dynamic means the file will expand as Windows needs more space, if you select it static it will have always the same size. Static is good for planing because you already know that that space is taken.

   • Last Step, File name and maximum size, This size will be reported to Windows as the size of the disk but is not necessarily the size of the actual file... remember is growing dynamically.

5. Review your options and click Finish.

6. Now your machine is going to appear in the main window on the left and if you select it, a report is going to appear on the right, with the settings for the selected machine and other useful information. Click on the Settings button.

   • General --> Advanced, there check for Shared Clipboard, put it in bidirectional, My recommendation for boot order is CD-ROM then HardDisk.

   • Select CD/DVD-ROM from the left, there you will have the option to use the actual CD-ROM drive or an ISO image. Select what is appropriated for your case. Where do you have the Potato Installation? ISO image is faster than the CD-ROM.

   • I always disable audio because it causes some glitches some times... and I don't use the Virtual Machine to play music anyways... I don't recommend playing games on the Virtual Machine... First DirectX is not supported and it going to be a crappy performance... if you want to play games... sadly... you will have to dual-boot (check our website for an upcoming guide).

   • Network adapter 0 – 4 are eth0 – 4, I always use NAT (Attached to) See the user manual for more information on this topic. 

     • When a virtual network card’s mode is set to “Not attached”, VirtualBox reports to the guest that a network card is present, but that there is no connection – as if no Ethernet cable was plugged into the card.

     • A virtual machine with NAT enabled acts much like a real computer that connects to the Internet through a router. The “router”, in this case, is the VirtualBox networking engine, which maps traffic from and to the virtual machine transparently. The disadvantage of NAT mode is that, much like a private network behind a router, the virtual machine is invisible and unreachable from the outside internet; you cannot run a server this way unless you set up port forwarding.

     • With Host Interface Networking, VirtualBox creates a new networking interface in software on the host computer. This new software interface will then exist in parallel to your regular interfaces (e.g., on a Linux host vbox0 will exist alongside eth0). When a guest is using such a new software interface, it looks to the host system as though the guest were physically connected to the interface using a network cable: the host can send data to the guest through that interface and receive data from it. This means that you can set up routing or bridging between the guest and the rest of your network.

     • Internal Networking is similar to host interface networking in that the VM can directly communicate with the outside world. However, the “outside world” is limited to other VMs which connect to the same internal network.

   • Last but not least, “Shared Folders” allows you to make local folders available to the virtual machine as network shares, it means windows will be able to access them or even mount them as network drives.

7. Now you are ready to start your virtual machine and install windows in it... Installing windows is a different article, but if you run into any problems post them here in the comments or in the forum and I will be happy to help you.

[EDIT]To be able to use USB devices(Flash/Thumb Drives, Webcam, iPod/Mp3 players, USB printers, etc) on your virtual machine, open a console and execute

$ sudo gedit /etc/fstab

Add the following 2 lines:

#usbfs

none /proc/bus/usb usbfs devgid=46,devmode=664 0 0

what this will do is mount the USB devices with permissions to everyone... this is not exactly a good thing in a shared environment, but in your personal computer it doesn't really matters. After this save the file and reestart. Now windows should "see" your USB devices.

[/EDIT]

I hope this guide has been useful to you, if you think there is something I missed or if there is any mistakes please let me know in the comments section.