A. VDI and Terminal Services are fundamentally different solutions. VDI is a combination of technologies, as I described in detail in a previous question. Microsoft has its own VDI that uses a combination of virtualization of desktops on a Hyper-V platform and uses RDP to access them. You then add virtualized applications and other applications so that desktops are quickly available with all the applications available for the users. Microsoft has partnered with third parties for the session brokering for virtual desktops, but in Windows Server 2008 R2 their Terminal Services session broker will support VDI.
With Terminal Services, many people log on to the same server to run their applications, but they are running their sessions on the same server as many other users and are running a server OS.
The difference between Terminal Services and VDI is isolation. The isolation is at the session level with Terminal Services. With VDI, each user connects to a separate, virtualized OS instance, so the isolation is at the OS level.
Check out this video by John Savill for more information about VDI.
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