Network virtualization literally tries to create logical segments in an existing network by dividing the network logically at the flow level (it is similar to partitioning a hard drive).
NV is an overlay; it’s a tunnel. Rather than physically connecting two domains in a network, NV creates a tunnel through the existing network to connect two domains. NV is valuable because it saves administrators from having to physically wire up each new domain connection, especially for virtual machines that get created. This is useful because administrators don’t have to change what they have already done. They get a new way to virtualize their infrastructure and make changes on top of an existing infrastructure.
NV runs on high-performance x86 platforms. The goal is to allow people to move VMs independently of their existing infrastructure and not have to reconfigure the network. Nicera (now VMware) is one vendor selling NV equipment. NV is for anybody who’s using virtual machine technology.