VirtualBox
Virtual Box is a virtual machine that is produced by InnoTek. It has very good documentation so it is very easy to use out of the box. Virtual Box supports booting from real media or images of floppies and CD/DVD-ROM's. While this tool is very good it lacks a debugger.
There are currently two versions of Virtual Box: a proprietary version and a GPL'ed version. The proprietary version has USB support, allowing guest operating systems access to USB devices plugged into the host computer.