[detuur]

I don't see how the real mode emulation on the 80386 (VM86) fails to meet the standard of the Popek and Goldberg definition. IA-32, yes, that took a while, but VM86 allowed 8086 (real mode) tasks to run as if they were running authentically in real mode while the 386 was in protected mode, and had all the features P&G describe in their definition. It runs natively, it runs with equivalent performance, and there's a VMM trapping privileged instructions to either emulate or arbitrate system resources. It's the full deal!

[anyfoo]

Yep.

I don't think P&G implies that the VM needs to run with exactly the same capabilities and characteristics as the host architecture. If that were true, then probably a large amount of modern virtualized machine are suddenly not P&G anymore, just because some obscure CPU (or other) feature might not be available in the VM, which is not a meaningful distinction.