<p>I'm looking for a broad overview of what I need to do and in what order to migrate a W2003 Server to a virtual server environment. Specifically:</p>

<p>How does it work in general?
Do I need to prepare my disks in any way?
What do I install first? The toolkit? Virtual Server?
Can I install linux later?</p>

<p>etc.</p>

<p>Any pointers welcome!</p>

Depending on which virtualisation platform you're migrating to there are tools to perform physical to virtual conversions:
http://www.vmware.com/products/converter/
PlateSpin was the product that we were recommended when we virtualised a chunk of our hosting platform to Virtual Iron.
http://www.platespin.com/products/powerconvert/
It'll convert physical to Microsoft Virtual Server, Virtual Iron, VMware and Citrix XenServer amongst other capabilities.
In reality we just ran our internal server build process on the virgin VM's which gave us the opportunity to start out with fresh machines and without the configuration 'rot' that happens over time to servers of a particular vintage.