you are referring to.

If you are referring to the Application VIRTUAL DRIVE for creating virtual CD drives on a hard drive check here:
http://www.farstone.com/home/ensite/products/virtualdrive.shtml

If you are referring to a Virtual drive on a virtual PC for installing and running other Operating Systems under a Host OS then look up Microsoft Virtual PC or VMWare.

Then too, a RAM drive would be another type of Virtual Drive.

Guess one could say in answer to "What is a virtual drive" that it is a drive that exists in virtual reality.