I've always been a fan of VMWare ESXi for scenarios like this, and would highly recommend it. The setup process is fairly easy if your hardware supports it. You can download ESXi 5.1 for free here: https://my.vmware.com/web/vmware/evalcenter?p=free-esxi5&lp=default.
I prefer to go the hypervisor route primarily for its simplicity from a support perspective. I want my time and resources spent working with the virtualized servers, not the physical one. Being able to call up another host 'on demand' is great, especially if you are testing software/etc and don't want to put something together.
As far as management, VMWare also provides management tools for ESXi, that give you the ability to manage just about all aspects of VMWare, as well as access the virtual console for those machines. It makes creating new VMs (or managing existing) a breeze. I'm not sure I'd use it beyond setup (I use RDP or VNC), but it's still very well featured.