Microsoft released the VSMT (Virtual Server Migration Toolkit )
VSMT automates the migration of an operating system and installed applications from a physical server to a server running within a virtual machine that is provided and managed by Virtual Server 2005.
Virtual Server is Microsoft's virtual machine software for servers based on the software the Microsoft acquired from Connectix Corp.
The toolkit supports migration of Windows NT 4.0, Windows 2000 Server and Windows Server 2003 systems to virtual machines running on Virtual Server 2005.
Use the Virtual Server 2005 from anything like development, testing, migration to data center like server apps hosting. Click the title of this post to the microsoft site for full details.
Note: Remember to read the licensing information when using Virtual Server 2005.