I’ve been using QubesOS (a xen/fedora distribution focused heavily on security by isolation) for a couple weeks now, and I’ve been really enjoying it. There are plenty of rough egdes when it comes to user-friendliess (granted, I’m on a beta release), but I’ve been able to get some pretty cool stuff working. Probably the coolest is having an independent VM which acts as a proxy and transparently makes all my (TCP) traffic go through the TOR network.
The next virtualization strategy I’m testing out is KVM. I’m using Proxmox as the management layer (similar to how I used XenServer on top of Xen), and this provides a nice API, command-line interface, and web-based GUI. Proxmox also makes it easy to do common tasks like pool servers and live migrations. To start, the first task is to automate getting a VM running.