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Does application virtualization mean virtualizing only stand-alone desktop applications and executables? Or does it also cover virtualizing webapps and web servers? Can Citrix's XenApp and VMware's ThinApp virtualize web applications and web servers?

A: 

" WebSphere XD provides application virtualization for a heterogeneous IT environment managing and optimizing a wide range of application servers including WebSphere, Apache, BEA WebLogic, JBoss, and Oracle application servers. WebSphere XD supports many operating systems, including AIX, HP-UX, Linux, Sun Solaris, Windows, and z/OS. "

Thus, WebSphere seems to be able to virtualize Apache.

Here ( http://planetlotus.org/profiles/john-willemse_47627 ) the author states that it is possible to "Run any version of virtually any application".

StarWind Software