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Yesterday I dropped by the Four Seasons Hotel to check out VMware’s public demo of its in-development virtualization software for OS X. I watched an Intel Mac Mini with 2GB of RAM run Windows XP within OS X, more or less the same way VMware Workstation or Player runs Windows within Windows or within Linux. Performance looked great, including smooth video and Webcam playback from within the virtualized XP instance. What I didn’t see, and what eventual users of VMware for OS X may or may not ever end up seeing (at least while remaining in DMCA compliance), is a virtualized OS X running within OS X. In order for this to happen, VMware will have to figure out, to Apple’s satisfaction, how to uphold one of Apple’s sternest commandments: OS X Shall Not Run on Non-Apple Hardware. There’s no doubt that running virtual OS X instances, with all the handy-for-testing snapshot and sandbox capabilities that virtualization can offer, would be of significant benefit to the developers assembled here at the Apple’s WWDC. What’s more, it’d be helpful for potential customers of Apple’s newly announced Intel XServe to be able to divvy up that machine’s new horsepower among virtual instances–without, at least, having to switch to an operating system with permission to run virtually. Fortunately for such forced switchers, Windows Server, Linux or really any other x86 OS this side of whatever runs the original Xbox is quite happy to run on arbitrary hardware, virtual or not. Beta code is due before the end of the year. I’m betting that Apple and VMware will work something out. What say you all?