Virtualisation... runs in a sandbox that basically loads Android apps, will work the same way as the Android player for the PlayBook. And as someone said, no substitute. Because you have the resources of the virtualisation software, PLUS the resources of the app itself, to deal with. Would not want to use it myself.
I used it on my W7 its software that enables you to run android apps, it was kinda laggy and needs some optimisations. But i don't think it will run on Wp8 for now.
It's an optimized emulator - I don't think it means that much ... but it's certainly not a bad thing. It's nice to have as much compatibility as possible.
I would hope that Windows 8 ends up with a lot more than 500k apps.