Check out the VirtualServer Migration Toolkit (VSMT)

VMWare ESX, contrary to popular belief, does not run without a host OS. They use a modified RedHat 7.2 distro called VMNix. One of the main advantages of running virtual server on Windows Server 2003 is that you are not limited to the hardware that your guest OS can run on. Windows Server 2003 supports a huge array of hardware out of the box. in addition, you can take advantage of the management and security features of Windows Server 2003.

Does MS plan to release a VM server that works like VMware ESX and runs independently of a host OS so I don't have to run 3 copies of Windows if I want 2 virtual machines?

You got it!!

- Ward

So based on the whitepaper above, Device Manager will show the same devices in every virtual machine everywhere, no matter what the physical machine actually has. Does this mean if my OS doesn't have a driver for my nic but does have a driver for the Intel 21141 NIC, I could run it in a vm and it would work fine?

Ward here.

Good question. You essentially got it. I would like to direct you to a white paper that I think will do a much good job at answering your more technical questions:

http://download.microsoft.com/download/5/5/3/55321426-cb43-4672-9123-74ca3af6911d/VS2005TechWP.doc