Virtualizing desktops seems like a no brainer! No wrappers (well almost no wrappers), custom settings that are saved, upgrades are nice and easy. I love it!
Before I get into the different products I found, it might be useful to list what I am actually looking for in a hosted hypervisor (a hypervisor is essentially the piece of software/logic that handles dolling out the system's resources to the individual virtual machines. A "hosted" hypervisor is one that runs on top of an existing OS, as opposed to a "bare-metal" hypervisor that you have to install AS the OS. See the Wikipedia article for more info if you're curious.).