Right now I've got ubuntu desktop with virtual box and dozens of virtual ubuntu machines... I'm setting up the next ubuntu server today, and I never thought about the "Virtual Machine Host" in the tasksel @ installation. There's nothing clear on it via Google... What is it exactly? Is it a virtual host machine (like virtualbox) within ubuntu server itself?
Pretty much, yeah. That task select option installs KVM, which is certainly a capable virtualization solution.
More specifically, it installs the ubuntu-virt-server meta-package.