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Multiple OS - Virtualization - Which way is best?

I have three seperate virtualization issues to resolve:

System 1:
On this machine - a new AMD Athlon64 x2 based Dell Optiplex 740, 2GB Ram - I need to run two simultaneous copies of Windows XP Pro.  Each XP VM needs to be running a different version of MS Office Enterprise as well as other apps.

System 2:
On this machine - same spec as above - I need to run Windows XP Pro & Windows Vista Business, possibly also Ubuntu.  Vista can be the main OS in use with XP and Ubuntu for OS compatibility or development / testing purposes.

System 3
On this machine - an older HP/Compaq  Intel 2.8Ghz - I need to run:
Windows 95 or 98SE, Windows XP Pro, Windows Vista Business, Ubuntu 8.04.  Note that the main OS used would be XP Pro and that performance on the other OS' is not so critical.  However the Win98 VM will need extended video support at 800x600 and 256 colours minimum

For each of the above situations:
Performance and ease of use / switching is important.  Eseentially in System 1 above, if the user wants to load Office 2003 he loads a VM called Office2003, if he wants Office 2007 he loads a VM called Office2007.  If he wants both at the same time this can be supported.

USB devices need to be supported - printers, scanners  and external hard/flash drives

Q1. What should the host OS be? - Ubuntu, Windows XP Pro or Windows Vista Business

Q2. What would be the best  - free - virtuliazer to use -  Virtual PC 2007, VMWare Server or VirtualBox?

Q3. Can I create an empty VM and install the virtual OS into it from scratch or do I have to create the hard computer and then capture an image ?

Any and all help would be most welcome.

Thanks.
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Thanks to both of you.

Please could you point me in the direction of how to create the blank VM and install, for example, Windows XP Pro into it ?  

I was under the impression that VMPlayer doesn't have the ability to create or modify a VM and that VMWare server only virtualises an existing physical machine.  I do not  want to have to purchase a licence for VM Workstation unless there is no other choice.

Have I understood you correctly that VMPlayer would offer better performance that VMWare server or Virtual Box.  On system 1, performance and USB support is very important

Thanks
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Thanks to both of you.  VMWare now running on PC and server using VMPlayer and VMWare Server.  Only thing I did find was that initial creation of the VM (via convertor) was diabolically slow
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VMware

VMware, a software company founded in 1998, was one of the first commercially successful companies to offer x86 virtualization. The storage company EMC purchased VMware in 1994. Dell Technologies acquired EMC in 2016. VMware’s parent company is now Dell Technologies. VMware has many software products that run on desktops, Microsoft Windows, Linux, and macOS, which allows the virtualizing of the x86 architecture. Its enterprise software hypervisor for servers, VMware vSphere Hypervisor (ESXi), is a bare-metal hypervisor that runs directly on the server hardware and does not require an additional underlying operating system.

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