Virtualization refers to a generalization or hiding of computer resources. It could mean having a single resource function like multiple resources. It could also mean the opposite thing, which is having multiple resources function as a single resource.
Contrary to creating a virtual machine, kernel virtualization is a technology on server virtualization that allows virtualization on the operating system or kernel layer. What typically happens in kernel virtualization is a single physical server would be partitioned into many smaller partitions. Each partition would then have the feel of the real server and it can also be used as such.
One advantage for doing kernel virtualization as opposed to platform virtualization is the low cost. The kernel level architecture requires very minimal cost. Because of this the use of server resources is maximized. Hundreds of virtual servers can be created and it can be done with minimal or negligible additional costs. One cannot achieve such in doing emulation or paravirtualization. To gain such level of density through either ways, it would require so much more cost to run multiple kernels. One disadvantage of a kernel virtualization though is that it does not allow other operating systems to run.
One thing to remember about it also is that since there is only one operating system running everything, proper maintenance is quite imperative. Proper isolation and proper resource management is quite important. In order to prevent resource abuse and compromise, proper isolation is needed. Proper resource management is also required in order to ensure continuous service rendition to all users of all partitions. Without such, denial of service to other partitions can happen.