In other words, they were bare-metal hypervisors which passed through the majority of the hardware, doing a minimum of virtualisation to allow sharing it between VMs. This is easy to see by comparing the responsiveness of a DOS box running something like EDIT in Win9x vs. NT/2K/XP's NTVDM; the latter is a full emulator of basically all the hardware except the CPU.
The unresponsive NTDVM was mainly due to its piss-poor text mode emulation. Win9x still virtualized the graphics card (so you couldn't use SVGA games in Win9x) but its emulation was implemented better.