Ok so the idea of virtualization is very simple in usage now. All you have to do is to install new version of the Virtual Pc from the Microsoft website (its free!). Then you go to the testing system images page here:

http://www.microsoft.com/downloads/details.aspx?FamilyID=21eabb90-958f-4b64-b5f1-73d0a413c8ef&displaylang=en

On this page you will find a few images of systems with Internet Explorer 6, IE7 and IE8. You can also select XP or Vista system in case you want to test your software on particular system version.

Then you load the image to virtual pc and run it. Its that simple! Then what i do is install all possible browsers in those machines so i dont even have fill my pc with crappy apps like old browsers. Also some browsers could collide with each other but having a few pcs like that you can have firefox 2 and firefox 3 without stress some dlls or config would be shared etc.

Last thing to remember is that those versions expire every few months so you will have to reinstall your apps but it will take like half hour and you are back in business.

It works perfectly, without it i cant believe i could test my site in all the browsers :- ) i just need to use my office laptop to test Mac crappy browsers, other stuff can be run on virtual machines now :- )