Almost everyone at work including me uses Kubuntu (install version). As far as live CD's are concerned I must agree with mitchmcse and vote for Knoppix. It's really easy to use and very intuitive. It' s shame it only comes as a live disk, though one of my colleagues recomended installing a raw Linux kernel, and copying on top of that all the programs, desktop, features, shell, tools etc. from the Knoppix disk.

Another one of my colleagues swears by Whax and refuses to hear about anything else.
Regarding Don's comments about VMware, or rather continuing on from them, VMware have ready made open source appliances.
Check it out here. You would never be able to get something like this from Virtual PC, because it's a Microsoft product, and for them consent to have open source software virtually installed on their OS would be like fraternising with the devil.
