Hmm.. What else is it about? Using VMware or Virtualbox is actually more dangerous from an isolation perspective because of shared folders and sharing USB drives between the guest/host OS.

Isolation is meant w.r.t. the concept of resources. Resources include, but are not limited to, network and file system access. Other resources, from which you might want to isolate processes, are other processes (or even just PIDs), CPU cycles, and memory. Isolation is also about limiting the impact of an exploit.