Vertual PC???

Do you mean the Microsoft Virtual PC? That is the free virtualization software provided by Microsoft. Its great for starters, but another alternative is VMWare's products which I have used and they work great. There is also the open source (in my knowledge) VirtualBox, which I have used to run many different distros of Linux from within Vista.

I havn't tried it yet, I have seen a virtual server implemented using Microsoft Virtual Server and another with vmWare (Linux). Install the Virtual server as the main booting OS in the physical computer, and you can have more than one computer virtually in a physical computer. After Installing virtual PC/Virtual server in a physical computer setup each server/PC inside the virtual server software, then we can have multiple virtual computers or PC in a single physical computer. It also have another advantage once we setup the virtual server the portability of server is very high, we can take the entire server as a single file take to another machine and then apply that file to the virtual PC/server software it can easily restore the entire virtual computer.

Actually, Windows Vista goes well with using virtual pc. The only thing to consider there is your processor power and also the amount of memory to use. Windows Vista is resource hungry so you should have higher memory capacity.