The Xen virtual machine monitor was recently merged into the upcoming 2.6.23 Linux kernel in a series of patches from Jeremy Fitzhardinge. The project was originally started as a research project at the University of Cambridge, and has been repeatedly discussed as a merge candidate for the mainline Linux kernel.
Xen is described in the project's FAQ as:
"Xen is a virtual machine monitor (VMM) for x86-compatible computers. Xen can securely execute multiple virtual machines, each running its own OS, on a single physical system with close-to-native performance."
The commit diffs: