From the Xen Koan dept.:
It is a common practice to have development and test servers for each production server, so that you can experiment with changes without the fear of breaking anything important, but this is usually not feasible with clusters. So how do you try that new version of your favorite program before committing it to the production cluster? A cheap and convenient possibility is to build a virtual cluster.

Thanks to the Xen virtual machine monitor, you can create a number of virtual machines, all running simultaneously in your computer, install different operating systems in them, or just different configurations, and connect them via (virtual) network cards. Xen is a terrific tool for building virtual Beowulf clusters. It can prove useful when learning or teaching about clusters or for testing new features/software without the fear of causing major damage to an existing cluster.

This guide is the first of a series in which I give you detailed step-by-step instructions on how to build a virtual cluster with Xen. The cluster thus built might not be appropriate for your case, and does reflect the author's preferences and/or needs, but if you are new to clusters or Xen, it will hopefully help you get started with both.

clustermonkey.net