I was talking with a VMware ISV Health Evangelist the other day and he mentioned with VMWare Workstation 7 you can now run vSphere 4 inside of VMware and have nested virtual machines. I thought that was curious as I have 6.5 and had heard you could already do it.
Why in the world would you want to be able to do this at all? The basic answer is your ability to Lab vSphere without having a dedicated box. This makes for all kinds of interesting scenarios. You could get an open source iSCSI server, virtualize it and then lab vMotion and vHA. This is without having the underlying physical requirements for ESX like SCSI or SAS hard drives.
Well I thought I remembered seeing you could already do this and low and behold it has been done. I purchased the Trainsignal vSphere training package awhile back and David Davis the instructor for the video series walks you through the process. You can find that portion of the video here .
In short you need an Intel processor that supports VT or an AMD processor that supports AMD-V. Of course with any virtualization you need as much RAM as you can get. I was successfully able to create a virtual instance of vSphere which had a nested instance of Fedora running inside. In addition, I had a Windows 2003 server running my Virtual center and everything ran smoothly with the exception of Fedora which ran a bit slow which is to be expected.
My system is a Dell XPS 410 with 6GB of RAM with a Quad Core Intel Q9300 running at 2.5 Ghz. I was able to keep all this running for a couple of days in the background without really noticing any performance issues running my day to day web browsing and word processing.
Next is to create an iSCSI SAN and implement vMotion.