No, VirtualBox emulates a VirtualMachine, like vmWare or VirtualPC.
It simulates a computer within the operating system you installed it in. With CPUs with Hardware Virtualization (C2D / A64(AM2) or higher) and 2Gib+ RAM you almost recognize no difference to a native installed OS.
You create a local file on your existing HDD which contains the Virtual Machine.
You can either put a Linux CD in your CD Drive or mount a Linux image into VBox´s virtual CD drive and boot from there. Once you start to install the VM installs itself into the “container file”.
Trying OS´s without touching your actual system
Being able to make snapshots of your VM
Being able to exchange the whole VM with others because VBox provides a uniform enviroment.
If you shipwreck your VM simply delete the imge file or restore a snapshot.
With a dual monitor setup you can simply run the VM on the other screen in fullscreen, or just run it in a window, as you like. you can attach the VMs network to your own via NAT, or install a host network interface and bridge it through.
For example you can setup a whole linux webserver in a virtual machine, and make it accessable from your PC or to the WWW. It runs in a “sealed” environment. You can also reach the VM then from outside via SSH or use the remote screen option to directly control the VM. Endless possibilities
Down to one point: VBox allows you to mess around with other OS´s without harming your actual system. (beside you delete one of the shared folders on the host machine from the guest´s UI)
oh and its recursive:
host: XP -> install VBox -> Guest:linux -> install Vbox in guest -> guest gets host -> install vista in vbox. ^^
and once you checked if your hardware is compatible and you want to get serious with linux i strongly recommend debian lenny (testing) beta2 netinstaller
The testing will be frozen soon and released as stable. And with the GUI installer its a piece of cake.
The advantage over (k)ubuntu is, you have all the up to date packages in the repository and no packages altered by ubuntu to be incompatible with the original debian packages.
And Fedora is rather for hardcore compilers than users looking into linux.