James, read up a bit on both Vservers and User Mode Linux, the
differences should quickly become clear. Usually, it should pretty
much boil down to:
If each user needs his own different Linux kernel (e.g., for kernel
testing), you need UML. If not, use Vservers instead. UML will incur
a much larger performance hit.
As
Xen
demonstrates, it's entirely possibly to run a fully virtualized Linux
(or Windows for that matter), kernel and all, with very little
performance loss vs. running on the bare metal. But that's really not
what UML is intended for.
If you're interested in this sort of stuff, check out the many links on
John Sequeira's
Virtualization Wiki.
