Virtual memory is the RAM that processes see when they're running, the memory space which the operating system allocates to them. The memory is called virtual because the addresses don't necessarily conform to physical memory addresses of the RAM hardware but instead the same address could refer to any number of possible physical addresses. It's up to the OS and the memory hardware to resolve the virtual address to a physical address, and do so transparently to each process.
Virtual memory can also refer to the data which was stored in physical memory but "paged out" to disk. The...