OverTheWire - offer a number of very good exploitation challenges (not your average boring stuff).
SmashTheStack - also offer varios challenges, better than the average.
HackThisSite - their realistic web missions are definitely worth checking out (from beginner to pretty complicated).
QEMU - full virtualization. Together with kqemu (kernel module) offer reasonable performance, no special CPU features requried.
KVM - full virtualization. Requires CPU support (/proc/cpuid - vmx for Intel, svm for AMD).
XEN - can do paravirtualization but also full virtualization with CPU support.
VMware - full virtualization. They have a decent GUI if you are into that kind of thing.
VirtualBox - full virtualization. Developed by SUN, haven't used yet.
Virtual PC - Microsoft's offering. Haven't used (don't plan to, either).
User mode linux - full virtualization. Run a new kernel as a user process.
Coding Horror - On Working Remotely - Some structure to follow for effective (geo)distributed teamwork