InformationWeek SMB TechEncyclopedia

Treating storage as a single logical entity without regard to the hierarchy of physical media that may be involved or that may change. It enables the applications to read from and write to a single pool of storage rather then individual disks, tapes and optical devices. Also called "file virtualization," it allows excess capacity on a server to be shared, and it can make migration from one file server to another transparent to the applications. See HSM, storage management, SAN and virtualization.

Not Necessarily "Virtual Storage"
Although the terms sound similar and can be sometimes used synonymously, "storage virtualization" and "virtual storage" often mean entirely different things. Storage virtualization deals with a pool of storage devices. Virtual storage is an alternate term for "virtual memory," which deals with extending the computer's internal memory by saving it to disk. See virtual memory and storage.