On a side note,

If you are wanting to use Linux you may want to consider User-Mode-Linux
as it has lighter resourse requirements and is quite active at the moment.
It includes several well tested methods of networking I have run about ~20
instances with networking on a 400MHz/128MiB computer a few versions 
back and was quite impressed.  Enough that I made the attempt for virtual 
disk partitions about October:)  It is however Linux (2.4) only and x86/PPC
though a day or two a go someone was asking about a sparc/sparc64 port.
Another nice feature is copy on write images allowing shared disk images
and saving only the changes made by each virtual computer

Good luck with your project.

http://user-mode-linux.sourceforge.net/networking.html
http://user-mode-linux.sourceforge.net/dl-sf.html

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