Virtualization? At what level?

I think the term 'Virtualization' has been overused in the industry. And with varying degrees of virtualization it can be confusing to determine and distinguish between the advantages of different types of virtualization.
So, there are several types of virtualization, one offered at HW levels so technologies like AIX LPARs and Sun Solaris Zones etc, which essentially virtualizes the underlying hardware, into commonly available resources pools. These allocation of resource pools are governed by allocation policies defined.
Then you have the VMWARE which essentially virtualizes the runtime, essentially allows of portability and ease of management (with factory like deployments). Although we have seen developments and offering by VMWARE that is creeping into virtualizing the hardware resource pools ( as discussed above).
WebSphere XD on the other hand play a role only in virtualizing the Application runtime environment. SO in theory it acts and play above the HW/VMWARE virtualization level and allows for the user to have a policy driven approach to 'sense and respond' type of management capability.
So, while there may be overlapping use of term 'virtualization' the value add differs significantly. In an environment that has virtualized HW platform, it is safe to say WebSphere XD will play well, since it will only have visibility to resources available to it ( provided by defined allocation policy).

Any thoughts?

Nitin