> ... You run the second (or third, or fourth) OS within a VM inside the first OS.
The "native" OS is the one that boots when the hardware of the computer starts up. Let's say that's Mac OS X. It will be the "host" OS of your virtual machines (VM).
Once the host is booted, you start an application task, same as if you were starting a word processor or web browser. Except that -this- task, instead of being an environment in which you edit a file or surf the web, is an environment in which you will boot another operating system. Completely "encapsulated" in the application's environment, the "guest" OS can be almost anything, including another copy of the same OS used as the host, if you want.
You can have more than one guest OS running, the same as you can have more than one application running -- they're independent environments.
You can do networking between them, share folders, etc. just as if they were on separate hardware.
You don't need VMware server, by the way. Here I am doing it on a MacBook (the small one), running:
- Mac OS X 10.4 (native, host)
- Windows XP Pro (guest VM)
- Linux Fedora Core 4 (guest VM)
- MS-DOS 7 (guest VM)
All these operating systems are running AT ONCE (concurrently), and they can communicate with each other and the internet.