VMWare uses virtualization as mentioned before. It doesn't have to emulate the CPU; it can send Intel machine code directly to the CPU. It just has to emulate hardware, and then largely just to provide concurrency between the two operating systems. As such, VMWare is much faster than VirtualPC can be. But that's because VMWare is designed to run x86 code on an x86 processor, while VirtualPC is designed to run x86 code on a PowerPC processor. There's a huge difference there.

One would hope that the x86 version of VirtualPC would take the virtualization route instead of emulation, but that's a huge change to the basic core of the VirtualPC software. The VMWare folks have been doing the virtualization stuff for many years, and do it well. Their changes to move to MacOS X would probably be less significant than those MS would need to move VirtualPC to a virtualization core. I wouldn't be totally surprised if MS decided not to bother.