Desktop virtualization is software that separates a computer's operating system, applications and data from a specific piece of hardware.

Shanen Boettcher, general manager of Windows product management at Microsoft, explained it to me this way when we talked about the company's broad virtualization strategy in January:

"Historically we have had dependencies at different layers. The OS was dependent on the hardware. The image that ran on your Dell didn't run on my Toshiba, it didn't run on that ThinkPad. Now with virtualization you have something that can move around on these different devices very easily," Boettcher said.

So how will Kidaro help out?

From Microsoft's press release: Kidaro's Managed Workspace product -- which is built on Microsoft's Virtual PC technology -- will streamline deployments and ease application compatibility issues. Microsoft said speeding up migrations to Windows Vista is a key benefit.

A Microsoft spokesman described Kidaro's tech as "a wrapper to enable enterprise class management, deployment and a seamless user experience over [the Virtual PC] product." It earned particularly high marks for integrating virtualized applications with the desktop.

Microsoft said the Kidaro technology will be added to the Microsoft Desktop Optimization Pack, which enterprises can purchase with a Software Assurance licensing agreement. As Ina Fried at CNET notes, several other pieces of the Microsoft virtualization puzzle have come through acquisitions, including Softricity (summer 2006) and AssetMetrix.

Some other details on Kidaro:

It has 35 employees spread among its headquarters in Redwood City, sales offices in New York City and Washington, D.C., and a development center in Ramat Gan, Israel, according to the spokesman.

Asked if any layoffs are expected, the Microsoft spokesman replied, "our goal is to retain the current R&D team in Israel." He also noted, "The majority of Kidaro's employees who continue employment with Microsoft will eventually join the company’s Microsoft Israel Development Center."

Financial terms of the acquisition were not disclosed.