Sun (Oracle) VirtualBox (Virtualbox.com ) is my favorite VM software. It works perfectly with my Slackware Linux host with a custom 2.6.28 kernel.
It has many great features such as experimental 3D guest support, shared folders, several networking options, and experimental multi-core support. Within my VMs I run Ubuntu 9.04, CentOS 5, a trial of Windows 2003 Server, and Windows XP without issue!
The best part of a VM is if you don't want the OS taking up space anymore you can delete it without have to fight to get HD space back. Give it a try. It's free and awesome!

If you havn't been able to tell already Slackware Linux is my distro of choice. I love it for it's simplicity, stability, and security. For many it's not simple, but it's how I learned to use Linux a long time ago. It can by hard, but it's well worth it to learn. Slackware Linux has been rated as the closest Linux distro to BSD and Unix. You don't need GUI tools to do everything. You get to do it all right from the shell! I love it and highly recommend it. Keep in mind. If you are new to Linux it may not be the best route for you to take unless you are willing to learn... and read.
Get it Here at slackware.com

MediaCoder is an excellent Universal audio/video transcoder. I use is mainly in XP, but it also works through Wine in Linux. There have been very few videos that I hane not been albe to transcode properely with MediaCoder, but I usually just check back for a new version and that generally solves the problem.
So, if you have a bunch of videos (or music) you need changed from one format to the other. Check it out. It is free and awesome! Don't forget to donate and support the project!