A Virtual Machine, as name indicates, is special software layer which behaves almost like a independent PC running on top of operating system. This Virtual PC can support another operating system.

For safe browsing, it is good idea to access internet on virtual machines because there is layer between host operating system and guest operating system. A virtual machine can be used for unsafe browsing as this machine can be destroyed without harming personal data. Of course, data on virtual machine will be lost.

Another way is to use a virtual machine to access financial or sensitive information. Virtualization layer between Host OS and Guest OS render most of the hacking techniques ineffective. However, this technique does not protect against key loggers as keyboard (or any computer peripheral) is still controlled by Host OS. To prevent key loggers to have access to personal information, a password manager can be used.

Please note, these machines are as effective as the user so always be cautious regardless. There are bunch of virtual machines available for free and few of them are listed here.

For details about Incognito, please visit www.patdouble.com.

Keyloggers can be defeated even if Incognito is running inside VM. If passwords are stored in firefox built in password manager then it will never be typed and then password is safe. Login password or password for password manager may still be available to key loggers however these passords are for your local VM machine. 

I customized Incognito to meet following requirements

• A system which can be carried on USB drive and as well have on home machine with ease of use.
• Data must persist on USB drive and on home machine.
• No home machine reboot for accessing internet, it creates adaptation barrier.
• Not USB bootable - Old machines does not have USB boot capabilities or not enabled in BIOS.

PortableApps is very convenient application management system which allows you to carry your favorite applications on USB drive and can be downloaded at PortableApps.com.

Not all applications can be made portable because of

• How application interacts with Operating system
• If application is not free. 
• Not all companies allow free distribution of their software.

However, PortableApps currently offers strong enough application suite for daily need. Check it out!