VMware Fault Tolerance, a new feature of VMware Virtual Infrastructure 4, provides the highest level on High Availability to Virtual Machines in the Virtual Infrastructure. Fault tolerance, in basic terms, creates a clone of a running virtual machine using VMotion technology. This then replicates, in real time, changes made on the primary virtual machine to the secondary virtual machine. Both virtual machines have the same IP address and the same MAC address.
In the event of a hardware failure of the ESX host where the primary virtual machine is running, the secondary virtual machine will take over at the exact point where the primary virtual machine dropped off. Therefore ensuring continues uptime and no impact to the end user. Previously, in Virtual Infrastructure 3, with only HA capabilities, the end user would have suffered 30 - 60 seconds downtime.
VMware demonstrates "VMware FT" here!