It's this seperate like little box(not literally) that can has any program in it and w/e and it will run but it cant affect the rest of the computer? Even viruses and it wouldnt infect the rest of the computer. I heard of it before dont know what is...

Are you thinking of a Flash Drive?

no.... its software....

Maybe a partition in a HD?

Fail grammar. Anyways I've never heard of such an software before. The only thing close would be a flash drive.
Edit:I have found it! Click

Your not referring to me, are you?

You mean a virtual computer? Virtual Box?

Virtual box is a software that enables you to run an isolated operative system in a window, inside your current operative system...

Virtual box is the free alternative to VMware. There's also VirtualPC from microsoft, which mainly sucks.

Wait found it it was sandboxie

I am currently using VirtualBox from Sun.I run Win 7 on it.