Got Windows 7? If you are going to do applications development on it, makes sure you get the Professional one – this allows you to write an emulation of Windows XP. Don’t have Windows 7? You will have to go for VMWare server. Why these two programs. Testing for backward compatability. With the expactions of web-applications to work on IE6 (this is a big debate, but the sad fact is that IE6 isn’t going anywhere any-soon), you need to test your web-apps and applications on different type of machine builds.

One problem is IE6 – You need to a fresh install of Windows XP and SP2 to get IE6. Well, that’s troublesome – however, with Virtual PC and VMWare, you can run multiple copies of OS with different builds on your PC. Just make sure for Virtual PC, your intel/amd chip supports virtualization and that it is turned on in BIOS. And you need  a freaking amount of hard-disk space.