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Hot off the presses from the Microsoft Worldwide Partners Conference:
https://www.microsoft.com/presspass/features/2006/jul06/07-12wpclicensing.mspx
https://www.microsoft.com/windows/virtualpc/default.mspx
Or if you don't want to read about and just want the bits, go here:
Unlike some other free offerings out there, this is the full version allowing you to create, modify, and save Virtual Machines. There are also some interesting licensing options coming with Vista so be sure to check out the announcement!