what is the idea behind virtualisation in s2008?

What role is it intended to perform?. Is it to make actual physical servers redundant? Other parts of a network redundant by virtualising them? Sorry for the newb question, trying to get a handle on what it actually is, and more importantly what it is intended to be used for. Thanks for any info! ....
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Why Virtualize: Server Consolidation, Business Continuity
MCSA 2003, LFCS, LFCE (expired), VCP6-DCV