It is my feeling that there has been a bit of confusion lately around how hypervisors are being positioned by the various vendors. I am specifically referring to the three major technologies that seem to be the most relevant strategically going forward:
VMware ESX is the VMware flagship hypervisor product: it's the basis for the Virtual Infrastructure version 3 framework.
MS Viridian is the next generation hypervisor that Microsoft is going to use in the Longhorn time frame and that is currently being developed. It's basically the successor of Microsoft Virtual Server.
Xen is an opensource hypervisor that is being integrated by a number of players which include RedHat, Suse, XenSource and Virtual Iron.
Massimo ReFerre from IBM has recently blogged the technical differences between Viridian (WSV), VMware ESX, and XEN. You can read the full article in his post "A brief architecture overview of VMware ESX, XEN and MS Viridian", and a snippet is below: