I've tried asking this question on other Mac forums, but I have never gotten a straight answer; I figured if there was one community which would understand the question it would be the Hackintosh community, so here it goes.

Does running OSX inside OSX work? For example, an iMac running OSX Lion, with another copy of Lion in a virtual machine (on that same iMac). Does anyone have any information on this topic? How well does the virtualization perform; does running it in a virtual machine seriously hamper performance?

It all depends on specs of your machine, but usually the virtualized OS will run slower than the non-virtualized one. Depending on the VM software you use, sometimes you can set it up so it gives the virtualized OS more power and speed (slows down your non-VM while running though)

And regarding the first part of your question, since truehybridx covered everything else, yep it works.

sometimes you can set it up so it gives the virtualized OS more power and speed