Virtual machines allow developers to isolate their projects and their dependencies to avoid conflicts between different projects. They provide a consistent environment that is shareable and portable across different machines. Vagrant and Docker are two common tools for setting up virtual machines. While both tools create isolated virtual environments, Docker uses smaller incremental images and makes it easier to set up multi-machine environments compared to Vagrant. Ultimately, virtual machines could help standardize development environments and minimize setup times by allowing developers to use identical environments locally and in production.