How To detect virtualized OS from an application

Have you heard about blue pill, red pill?. It's a technique used to see if you are running inside a virtual machine or not. The origin of the term stems from the matrix movie where Neo is offered a blue or a red pill (to stay inside the matrix = blue, or to enter the 'real' world = red).

The following is some code that will detect wheter you are running inside 'the matrix' or not:
(code borrowed from this site which also contains some nice information about the topic at hand):

int swallow_redpill () {
   unsigned char m[2+4], rpill[] = "\x0f\x01\x0d\x00\x00\x00\x00\xc3";
   *((unsigned*)&rpill[3]) = (unsigned)m;
   ((void(*)())&rpill)();
   return (m[5]>0xd0) ? 1 : 0;
 }