Network Settings for Mac OS X Virtualization Software

By John Rizzo from Mac OS X Lion Server For Dummies

One of the reasons virtualizing server operating systems like Lion Server is possible is that virtual machines can act like real computers on your network. They can access the Internet through your connection, and other computers see the virtual machines as real networked computers. In fact, the host and guest operating systems can all see one another as networked computers.

Configuring networking in virtualization software is as simple as clicking a button. Three types of networking connections are available in VMware, Parallels, and VirtualBox:

Bridged: This is the best choice for deploying a server on a network. The virtual machine has its own IP address and appears as a separate computer on the local Ethernet network. You can configure a static IP address if you need to.
Shared or NAT (network address translation): With this setting, the Mac can access the Internet, but other computers on the local network can’t see it. The virtual machine doesn’t have its own IP address. (It gets its IP address from a virtual DHCP server.)

This is a good choice if you’re installing Lion Server in a virtual machine, for which you need an Internet connection, but don’t want to expose the virtual machine to your local network.
Host-only: In this configuration, only the host computer sees the virtual machine on the network, and the virtual machine sees only the host, not the Internet. The virtual machine uses a virtual private network to connect to the Mac.

This is a good choice if you want to test a server without exposing it to the network or the Internet. If you have multiple guest operating systems using host-only networking, the host Mac OS X can see them all on the same network, but they can’t see one another.

When you create a virtual machine and install the guest OS, one of these choices is picked for you. You can change this just before you hit the Install button or easily afterward.