Qemu is a free x86 Emulator/Virtual Machine for Linux and Windows. If you are looking for something faster try the Linux Kernel Module (currently just working with CVS-Version) or VMWare.
Grabbing debug messages
By default debug messages from ReactOS are sent to the serial port (COM1). For grabbing that output, you need at least qemu version 0.6.1 where you can specify the -serial option.
$ qemu -serial stdio -cdrom roslive.iso -boot d
If you are testing the setup cd, note that you can change the kernel arguments by editing the txtsetup.sif file (so things actually get written to the serial port).