CPU Virtualization?

You really want to enable virtualization in your bios.

There are two ways you can do virtualization - in software or in hardware. Before recent CPUs that support hardware virtualization, this was always done in software with programs like VMWare or Virtual PC. These software solutions "virtualize" a second processor to run a second OS, and obviously there is some overhead involved in this (hence why a virtual OS never quite performs as fast as a native OS).

However, with the introduction of hardware virtualization, a single CPU can act if it were several CPUs running in parallel, allowing the system to run several operating systems at the same time. In theory hardware virtualization should be more efficient than software virtualization.

Software such as Xen, VMWare and Virtual PC support hardware virtualization. Xen is a little different than programs such as VMWare and Virtual PC that run on top of a conventional OS in that it uses a thin software layer known as a hypervisor (basically a virtualization-enabled kernel) that is inserted between the server’s hardware and the virtualized operating system(s), so there's not really an underlying OS as such like Windows. Xen is very popular with hosting companies that want to host multiple virtual servers on a single hardware server.

Also, I believe if you don't enable hardware virtualization in your bios, on a C2D system you would only see a single core processor on your virtual machine as the virtualization would be performed in software.