One of the up-and-coming virtualization suites, VirtualBox, has recently seen a hefty update. Sun has released VirtualBox 2.1.0, adding numerous new features that bring the suite much more in-line with what larger vendors like VMWare are currently offering. Some of the biggest changes they have added with this release include hardware virtualization on Mac OS X systems, through the use of Intel and AMD virtualization technology on modern CPUs. Another big change is the ability to emulate a 64-bit guest on a 32-bit host system, which could be a very useful way for developers to work on application portability without needing access to 64-bit hardware.
They have also updated the networking components for the system, improving them and making networking easier to configure, and added experimental 3D acceleration using OpenGL. This is all on top of a smattering list of bug fixes.
Sun's offering has definitely seen a lot of maturation since the company acquired VirtualBox. If they really want to push VMWare out of the market, though, they're going to need to create a hypervisor platform, moving beyond their current desktop-based system. VMWare is currently holding on to their market share largely due to them being the first to have a true hypervisor, and it has only been recently that companies such as Cisco using Xen have been able to erode that. Without a "bare metal" hypervisor, Sun will have a hard time getting onto enterprise servers.