Virtualization on desktop / workstation: Sun Virtualbox or VPC. Easy, light. We share our favorite images, keep it causal, and sometime even sysprep them.
Main QA environments get serious with Manager. It's a beast to get working, but can't live without it. There's no way we could afford our test matrix in real machines, or maintain it without the template management. Without such a resource, there are probably things you should do and don't.
Long lived servers or QA DB: VM Ware ESX. (No short explanation).
We don't have perf problems with DBs and virtualization. Well, I did in Lab Manager - which is part of why DB's live on ESX in our shop. For I/O, our IT guys do magic with SAN, iSCSI, and high quality wire. It is certainly simpler to avoid perf problems on db servers if they are bare metal, and probably possible to squeeze out more perf from a dedicated host.
Which brings up what virtualization is and isn't for: Virtualization isn't for a scenario where you are maxing out your hardware already. For example, I don't use it dev on, because I need everything my dev box can give me. It's to replace dozens of underutilized, hard to provision physical servers, with dozens of easy to provision virtual clones on many fewer hosts. It allows hot swapping more capacity, or allows engineering flexibility.
I also have some late 90s computer games that I run in virtualized Windows 98.