The physical server typically runs a hypervisor which is tasked with creating, releasing, and managing the resources of "guest" operating systems, or virtual machines. These guest operating systems are allocated a share of resources of the physical server, typically in a manner in which the guest is not aware of any other physical resources save for those allocated to it by the hypervisor.
The Guest system may be fully virtualized, paravirtualized, or a hybrid of the two.
In a fully virtualized environment, the guest is presented with an emulated or virtualized set of hardware and is unaware that this hardware is not strictly physical. The hypervisor in this case must translate, map, and convert requests from the guest system into the appropriate resource requests on the host, resulting in significant overhead. Almost all systems can be virtualized using this method, as it requires no modification of the operating system, however a CPU supporting virtualization is required for most hypervisors that perform full virtualization.
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