If you want to run linux processes with isolation from your physical machine, install an OpenVZ enabled kernel plus the openvz packages. It nicely isolates processes running inside each container; there is minimal virtualisation overhead (so you don't need a bigger machine).
Also the container root filesystem is an ordinary directory on your host. This means you can put multiple containers into a large filesystem and they share the available space, you can backup or copy containers trivially, and you can extend or reduce the amount of space available in the root filesystem while the container is running.
The amount of storage used per instance depends on your distro size; I start each instance with a minimal set of debian packages from a template occupying about 200 megs, and install more from there.
www.openvz.org.