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.

• VMware: Browser Appliance

VMware is market leader in virtualization market. VMware Player and VMware Server are available for free download. VMware also hosts virtual machines, called Virtual Appliance. One can download different "Appliances" and try them out. Browser Appliance is Virtual Machine for casual browsing as it does not have powerful mechanism to protect sensitive data.

Also VMware is not portable i.e. can not be carried on USB drive

• MetroPipe : Anonymous Internet Services

Metropipe offers VM for private access and provide somewhat protection and anonymity. However, their free offering is not powerful enough. Paid service do provide better protection. This system is build using Damn Small Linux! (DSL) and Qemu and reasonably fast and can be carried on USB drive.

• Moka5 : Fearless Browser  
  

This is VMware based portable system. Moka5 provides interface to manage various Moka5 based Virtual Machines. Fearless browser is one of the Moka5 VM which is combination of Linux+Firefox+Tor.

Tor network is very interesting technology to provide users reasonable anonymity for free.

• XeroBank: xB Machine

This is VMware appliance in development. It is little slow. However, xB Machine does provide user data encryption and is more secure compared to above VMs.

• Incognito: by Pat Double
  

This is one of the most comprehensive secure system, I could find (See  Anonymity Anyware also). Incognito is Gentoo Linux based LiveCD. One can boot this live CD or run this live CD as virtual machine in Qemu.

Please note that Incognito authors does not recommend running Incognito inside virtual machine and rightfully so as VMs does not provide protection against Key loggers. However, problem with booting from LiveCD is that it does not preserve user data.

Incognito does provide mechanism to create bootable USB drive and store user data on USB drive. Incognito comes in two flavors, tiny edition (50MB) and full edition (350MB).

• Custom Incognito

I modified Incognito to meet following

• 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.

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.

Custom Incognito 

Incognito liveCD is hacked to make user data persist while running it under Qemu. Modified Tiny Incognito can be downloaded from download section.

Size of download is ~100MB (= 50MB (Incognito HD) + 30 MB (User Data) + Qemu + Incognito Boot ISO).

Full version of Incognito is also available, however, I am not able to find a place to host such a large file (400 MB). If you are interested, please email me .

Custom PVPM

Incognito system is too resource intensive for old  machines. A custom PVPM is available for download . This is based on Damn Small Linux! and idea is copied from Metropipe PVPM.