Marketing is a strange beast. Server virtualization in Windows Server 2008 - e.g. the replacement of Virtual Server - will be called Hyper-V. I already hate that name! HyperV perhaps - but why the hyphen??
Anyway, Hyper-V will be a server feature that can be turned on. Microsoft is also planning a Hyper-V Server SKU.
Hyper-V is still expected to be delivered 6 months after Windows Server 2008.
On the management side, it was demoed at the keynote here in Barcelona, a virtual server manager that could manage Virtual Server 2005, Hyper-V *and* WMware server!