Multi-core technology is bringing parallel processing capabilities from servers to laptops and even handheld devices. At the same time, platform support for system virtualization is making it easier to consolidate server and client resources, when and as needed by applications. This consolidation is achieved by dynamically mapping the virtual machines on which applications run to underlying physical machines and their processing cores. Low cost processor and I/O virtualization methods efficiently scaled to different numbers of processing cores and I/O devices are key enablers of such consolidation. This dissertation develops and evaluates new methods for scaling virtualization functionality to multi-core and future many-core systems. Specifically, it re-architects virtualization functionality to improve scalability and better exploit multi-core system resources. Results from this work include a self-virtualized I/O abstraction, which virtualizes I/O so as to flexibly use different platforms' processing and I/O resources. Flexibility affords improved performance and resource usage and most importantly, better scalability than that offered by current I/O virtualization solutions. Further, by describing system virtualization as a service provided to virtual machines and the underlying computing platform, this service can be enhanced to provide new and innovative functionality. For example, a virtual device may provide obfuscated data to guest operating systems to maintain data privacy; it could mask differences in device APIs or properties to deal with heterogeneous underlying resources; or it could control access to data based on the ``trust' properties of the guest VM. This thesis demonstrates that extended virtualization services are superior to existing operating system or user-level implementations of such functionality, for multiple reasons. First, this solution technique makes more efficient use of key performance-limiting resource in multi-core systems, which are memory and I/O bandwidth. Second, this solution technique better exploits the parallelism inherent in multi-core architectures and exhibits good scalability properties, in part because at the hypervisor level, there is greater control in precisely which and how resources are used to realize extended virtualization services. Improved control over resource usage makes it possible to provide value-added functionalities for both guest VMs and the platform. Specific instances of virtualization services described in this thesis are the network virtualization service that exploits heterogeneous processing cores, a storage virtualization service that provides location transparent access to block devices by extending the functionality provided by network virtualization service, a multimedia virtualization service that allows efficient media device sharing based on semantic information, and an object-based storage service with enhanced access control.