Virtualization is an old concept that provides abstraction and security through CPU execution modes and virtual memory management. There are two main challenges for virtualization - handling privileges and virtual memory address translation. Hardware virtualization techniques address these by introducing a hypervisor mode and advanced page table structures, improving performance over older binary translation methods. Database performance in virtualized environments is impacted by the overhead of interrupts, system calls, and memory management, so optimization techniques focus on reducing these costs through configuration tuning, hardware choices, and I/O isolation strategies.