www.vmware.com
you download vmware workstation (evaluation, you need to buy it), or vmware player (free, but you will have to use another software to create your virtual machine).
so basically, it's a software, you install it, and run it. with it you will be able to create a virtual pc. once you run it, you will have your virtual pc booting in a window inside windows/linux/mac (codename fusion). once you run your virtual pc, it just acts as a regular pc, you put a cd/dvd in your drive, boot the virtual pc, and install an operating system. you will have a fully functional pc inside a window in your current operating system. so if you have windows xp, you can have any other OS (dos, windows vista, linux, macos x86, ...) in a window.
consider looking at this video to have an idea of what it is:
http://www.youtube.com/watch?v=Bh5H2KMX6Ek