I want to play with VMs. So where do I get started?

Readers' corner Reg reader Neoc has fired up this thread on El Reg Forums:

A few years ago, a local company moved and sold some of its IT equipment. I purchased their rack cabinet, all 1.9 meters of U's. First thing I built was a storage box - got a rackmountable computer case and stuffed it with 9x2TB worth of hard-drives. Still running like a charm after 3+ years of almost no downtime.

Now,I want to play with Virtual Machines, Hypervisors and the ilk. So my question is: considering that this is a home project, what should I get i terms of hardware and software? I have a fileserver with enough storage (well... two now - I got bored), so local storage is probably low on the list. But what CPU/motherboard would be best for a home set-up? What about the choice of Hypervisor - bare-metal or running in an existing OS? And if so, which? Choices, choices, choices.

What are your pearls of wisdom? Answers, please in this forum thread. ®