I would install Windows on the server and then install MS Virtual Server (it’s free).
When you have this installed, you can then install other OS’s on that server (this can be windows / Linux, etc) within the virtual environment.
When you do this, the Virtual server creates a file containing the Virtual machine image.
you can then make a copy of the image created so if you eveer need to revert back to the origional
install, you just have to revert to your initial copy. Very quick and easy.
You can also run multiple images on the same server, so could create a test lab on one box.
More info here: TechNet Evaluation Center.
while you are at it look at VMware as well. I test on up to 12 VMs on one host server and can tesst multiple scenarios at once.
I would have to recomend VMWare as well. I have VMWare’s ESX product installed on a dev server, and that one server is currently hosting about 35 virtual servers with room to continue to grow. If you don’t want to remove the Windows OS which is currently installed (as ESX is it’s own operating system) you can install VMWare Server which runs as an application within the Windows OS and will allow you to host plenty of virtual servers.
As for connectivity to the servers, I simply use RDP to connect to the Virtual Machines.