LXC is interesting. It has been around probably for 5 or 7 years or so. At least I remember looking at it then. Then it just kind of made slow progress. It has been in the kernel since probably since 2.6.30, for example. But aside from kernel and virtualization forum discussions, it just didn't get much attention. That was kind of odd because it is a very cool piece of technology.

Then I guess something happened in the last year or so and all of the sudden it became very popular. dotCloud certainly has a lot to do with it. Was it better libvirt integration, too, perhaps: http://libvirt.org/drvlxc.html

Now of course it cannot completely replace KVM because it is more of a container than a full virtualization. So running Windows VMs on will not work. For Linux one could probably have a farm of hosts based on various distros (with LXC enabled) and that would provide the ability to run various Linux OS guests, by picking the hosts that matches it.