Microsoft has two VM (virtual machine) solutions: Virtual PC 2004, and Microsoft Virtual Server. Since an MSDN subscription comes with both, how do you know which one to use?

Microsoft has published a white paper describing the differences, but in a nutshell the main differences are

• The "officially supported" operating systems are different. Client OSes are supported on Virtual PC, while server OSes are supported on Virtual Server. In theory, both products should run the same OSes (see the What Works in Virtual PC site), so it's just the "official" support that differs.
• Virtual PC has sound, Virtual Server doesn't.
• Virtual PC makes it easier to drag & drop files between the host computer and VMs.
• Virtual PC has the "shared networking" mode to make it easy for your VMs to connect to the web.
• Virtual Server has support for multiple CPUs, hyperthreading, 3.6 of RAM, and SCSI drives. It also offers better control over VM CPU & memory utiliization.
• Virtual Server offers remote administration via WMI, MOM, RDC, the Virual Machine Remote Control (VMRC), and other server management tools.
• Virtual Server can be controlled via a COM API.
• Virtual Server offers more networking and multi-server options, including clustering.

So...if you need to emulate a number of servers talking to each other and let them use your beefy dual-CPU box with 4gb of ram, you might want to use Virtual Server. Otherwise you can probably use Virtual PC.