One of the most interesting advancements occurring within virtualization and open source is the ability to host a hypervisor on top of another hypervisor (using a concept called nesting). Typical usage model is that the hypervisor serves as an abstraction of the physical platform to guest virtual machines. With nesting, the host hypervisor provides the base level abstraction for either a virtual machine (as the typical case) in addition to a guest hypervisor.
Long it was stated that running hypervisor as VM ontop of host hypervisor was not possible. However, vmware workstation 8 and ESXi5 can now run Hyper-v (with hyper-v running one or more vms). Running nested hyper-v requires few config file modifications for vmware/ESX, but that not all. Hosting Hyper-v as a VM, its required to select Virtualization engine as "Intel VT-x/EPR" (or which support nesting).
Although hypervisor nesting does require special hardware, with the advent of Intel's 3rd generation i5/i7 hardware which supports "Intel® VT-x with Extended Page Tables (EPT)" functionality, nesting is possible with desktop processors.
While nesting might seem to be a odd usage model, consider its application to cloud computing. Clouds commonly require virtual machines to conform to their hypervisor of choice (windows on hydper-v, Linux on KVM, etc) But if that hypervisor supported nesting, then the user could provide not only their virtual machines, but also the guest hypervisor of their choice. This also provides an extra abstraction for the user, adding portability to clouds (the ability to easily switch between cloud providers).
