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koding.com has a free VM running Ubuntu. The specs are pretty good, 1 gig memory for example. They have a terminal online you can access through their website, or use SSH. The VM will go to sleep approximately 20 minutes after you log out. The reason is to discourage users from running live production code on the VM. The VM resides behind a proxy. Running web servers that only speak HTTP (port 80) should work just fine, but I think you'll get into a lot of trouble whenever you want to work directly with other ports. Many mind-like alternatives offer similar setups. Good luck!
The force driving server virtualization is similar to that which led to the development of time-sharing and multiprogramming in the past. Although the resources are still shared, as under the time-sharing model, virtualization provides a higher level of security, dependent on the type of virtualization used, as the individual virtual servers are mostly isolated from each other and may run their own full-fledged operating system which can be independently rebooted as a virtual instance.