Update: Unfortunately, as of the September 2009 release, the VPC images from Microsoft have been changed and are now a bit more picky about activation. When you follow this procedure, the images will now fail activation. I've left this page up so that the procedure can be tried on future releases of the images.
Virtualbox is a virtualization product produced by Sun. Available for Windows, Linux, OS X, and Solaris, it not only is fast and full of features, but free! Most of the product is available under the GPL. Some additional features, such as USB and Remote Desktop support, are available free of charge for personal and small-scale commercial use.
Unfortunately, Virtualbox doesn't come with a robust set of tools to convert disk images. While you can convert images between Virtualbox (VDI) and VMWare (VMDK), as well as from straight raw disk images, you can't easily convert images from Microsoft's VirtualPC format. This is an issue when you want to use Microsoft's free VPC images for testing various versions of Internet Explorer. Luckily, with a little bit of help from QEMU, it's possible to convert these images into something usable, all without needing a copy of Windows installed to bootstrap everything.