Quoting Heise Online

Linus Torvalds has included the virtualization environment KVM (Kernel-based Virtual Machine for Linux) in the tree leading to Linux kernel 2.6.20. In the case of KVM the kernel after loading a special module itself functions as a hypervisor for virtual machines. This approach however is predicated upon the cooperation of the virtualization functions of up-to-date x64 processors by Intel (VT: Vanderpool) or AMD (AMD-V: Pacifica/Presidio, Secure Virtual Machine/SVM). The support for AMD's technology, which was completed only recently, is part of the included source code; while the description taken from older patches apparently mistakenly talks of support for Intel CPUs only. 

Thanks to its approach KVM already runs in the current kernel, without any extensive bouts of patching and compiling being required, after the fairly simple compilation of a module. Virtual machines that run unmodified operating systems are meant to appear in the host as a simple process and work independently of the host kernel. In a fashion comparable to that of Xen a modified QEMU is used for the supportive emulation of typical PC components of the virtual machines.

KVM, which was presented to the public only barely two months ago, thereby easily overtakes other virtualization solutions such as Xen, OpenVZ and Vserver, which are based on other approaches, on the path toward integration into the kernel. Xen, for example, has been hoping in vain to make that leap for almost two years now. With the likewise accession to 2.6.20 of the hypervisor interface the chances of Xen at least of finally approaching the Linux kernel are likely to go up once the environment builds on the new interface.

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