VMWare is the way to go for desktop virtualization. Especially if you have a Mac, VMWare Fusion is the win. However, for server virtualization, Xen is really where it's at these days. If you want to learn something useful, go for Xen.
Nah, been there, done that, it's really not too bad. I ran my virtual server on a 1.8 sempron for a long time, and I had two VMs going. When you remoted into the server you could never tell it wasn't it's own machine, just as snappy as anything else. Of course it depends on what you're doing, if you're trying to calculate the cure to cancer in your virtual machine it's gonna bog things down a bit. But for the average home user who wants to play with VMs, it's ram more than processor power that you need.
It's enough for most things actually. In the case of virtualization, having more than 1 gigabyte of RAM does speed things up, but 1 GB alone is enough though.
Comments
What do you want to do with this computer? Cause you might be better of virtualizing Ubuntu in Windows, depends on what your goals are. Why not? XP only needs 512MB to do most of what you need and Vista really only needs 1GB.