When I was faced with this problem I toyed with the ideal of installing Windows Sever 2008 and Hyper V however I decided to give VMware Player a go. I must admit I was presently surprised with how easy it was to get up and running and natting worked without any configuration. Added bonus is that it is free. I would definitely recommend it.
If you have existing VHD images that you want to convert to a VMWareVMDK virtual hard disk then I would recommend wimimage which allows you mount hard disk images and converts them. http://www.winimage.com/
I believe VirtualBox is also a good tool but I have not had a chance to try that yet.