Take a look at http://onesis.org/ http://onesis.org/ for some tool for building a small root filesystem. You'll want to have your kernel separate anyway. You c

Take a look at http://onesis.org/ http://onesis.org/ for some tool for building a small root filesystem. You'll want to have your kernel separate anyway. You can then use the new "KVM tool" (http://lwn.net/Articles/447556/ http://lwn.net/Articles/447556/) to run your VMs. It's far, far lighter than QEMU and only provides a small set of virtio devices. If you're going to have all the applications run on the X server of the host, you'll basically just need virtio net. However, if you're doing this for security reasons, take note of what another poster mentions: any X client can sniff the keystrokes of any other X client. It's possible that Xnest (or the new hotness, Xephyr) could solve this problem for you, but I don't know for sure.