In what could be construed as a shot directly across VMware's bow, Microsoft has announced that as of now, Virtual PC 2004 is free. The virtualization software which, like VMware Server, allows many operating systems to run simultaneously on top of a host OS. Unfortunately it's only the Windows 2000/XP version of Virtual PC that's going free--the Mac version still has a price tag of $249.
There's other good news, though: First, Microsoft has also announced that Virtual PC 2007 is in the works. Few details are available yet, but Windows Vista will be supported as both a host and guest OS, with support for 64-bit Vista and improved performance. Second, Microsoft will be loosening the license restrictions for enterprise customers and allowing up to four copies of Vista Enterprise Edition and Vista Ultimate to run on virtual machines for a single user.