OpenVZ is container-based virtualization for Linux. OpenVZ creates multiple secure, isolated containers (otherwise known as VEs or VPSs) on a single physical server enabling better server utilization and ensuring that applications do not conflict. Each container performs and executes exactly like a stand-alone server; a container can be rebooted independently and have root access, users, IP addresses, memory, processes, files, applications, system libraries and configuration files. For more information about the technology and how it differs from the others like Xen, VMware etc., see introduction to virtualization, openvz-intro.pdf or the Wikipedia.
OpenVZ is free open source software, available under GNU GPL.