A virtual machine resides on a physical machine. A physical machine can host multiple virtual machines. 

A physical machine can be whacked with a hammer. A vdi is a virtual machine, which is only in software. There isn't anything physical you can kick when it misbehaves.

>a desktop would be a physical machine
Hmmm...many people refer to 'the desktop' as the provision of software services on a PC, which *may* be physical but equally may not be. Also, there is the actual Windows 'Desktop' to consider. This highlights how important the choice of language can be when describing problems and solutions.

Tough Q with a fast blurring line.