Running OS X and Windows simultaneously

Bootcamp is designed to allow you to change your operating system while the computer boots.

Nothing allows you to swap purely back and forth between operating systems that way. What you can do is use software that runs Windows in OS X with hardware virtualization, a huge step up from the software virtual machines of old.

There are three good options: Parallels, VMWare Fusion, and VirtualBox, the last of which has the advantage of being free.

If you want more technical details, particularly the ones that drove an edit to improve this answer, read the comments below.

VMware Fusion has a nice feature in 3.x called Unity that allows Windows applications to run on the Mac desktop without running in a window that also runs Windows. This means that you could have Word 2010 running with the look and feel of Word 2010 on Windows 7, but as another application Window on your Mac.

Windows must still be booted as a VM - it's just that VMware Fusion hides this. Applications in Unity mode can be pinned to the dock just like regular Mac OS X applications. Launching them launches VMware, which boots the VM and then spawns the application.

This is akin to Wine on Linux, except a full VM of Windows is running - no API translations, full Windows fidelity.

You can alt-tab amongst Mac and Windows apps.

See: http://www.tuaw.com/2007/06/06/vmware-fusion-unity/