I use virtual machines too. VMWare Fusion on my Mac is great.

Using snapshots is how I'll test new software. If I want to revert back to the way it was before the install, I activate a previous snapshot.

Using Virtualization allows me to test software with different versions of IE. How many versions of IE can you install on one OS instance? One! So, you can have several virtual machines with each version of IE to test with. Also, you can test with XP, Vista, Windows 7, Mac, etc. I don't know what I would do if visualization was not a possibility.