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q: is it possible somehow to run old red hat 8.0 32bit inside debian 4.0 64bit (virtualization)? so ive got this disk image file of a failing server that id like to run inside much newer box. since i cannot dedicate this new machine im thinking virtualization. is it possible?

a: yes it is.
you can do it with xen, kvm or even openbox. maybe you will have to deal with boot issues or even mount the old image and cp it to the new one, but it is possible. what you are trying to do is physical to virtual or p2v. google it and you will se various cases, like this one.

a: yes. ive done this specifically with redhat 8.0 using vmware server 1.0 and 2.0 products, but any virtualization solution should work. youll want to check a few p2v (physical to virtual) techniques to see what will work best for the source system, though. a couple of quick links:
http://boink.pbworks.com/w/page/7045897/linuxp2v
http://conshell.net/wiki/index.php/linux_p2v

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