I understand that there might be a good reason for Intel to add virtualization extensions to their CPU architecture. Instead of fixing the x86 architecture to (optionally) make it Popek-Goldberg compliant and have all critial instructions trap if not run in Ring 0, they added non-root mode, a very big hammer that allows me to switch my CPU state completely to that of the guest and switches back to my original host state on a certain event in the guest. Well, it’s a great toy for people who want to play with CPU internals.
UNIX, Windows NT, and all the operating systems in their class rely on virtual memory, or paging, in order to provide every process on the system a complete address space of its own. An easier way to protect processes from each other is segmentation: The 4 GB address space of a 32 bit CPU is divided into segments (consisting of a physical base address and a limit), one for each process, and every process may only access their own segment. This is what the 286 did.
Virtualization means running one or more complete operating systems (at the same time) on one machine, possibly on top of another operating system. VMware, VirtualPC, Parallels etc. support, for example, running a complete GNU/Linux OS on top of Windows. For virtualization, the Virtual Machine Monitor (VMM) must be more powerful than kernel mode code of the guest: The guest’s kernel mode code must not be allowed to change the global state of the machine, but may not notice that its attempts fail, as it was designed for kernel mode. The VMM as the arbiter must be able to control the guest completely.