You can create both multiple logical domains and multiple zones on a T5220.
With logical domains (Oracle VM for SPARC), you simulate different physical machines, each one with its own Operating System.
With zones, you have OS level virtualization including the ability to simulate older Solaris releases with S9 and S8 branded zones.
On the other hand, I'm not aware of any usable and current Solaris on SPARC emulation layer available for x86.