A new term Virtual Federation was invented recently in identity federation world. It is actually a new name for Secure Attribute Exchange (SAE), a key capability of the upcoming
Sun Federated Access Manager 8.0. Virtual Federation will help enterprises to overwhelm challenges, like scalability, legacy applications, transient and transaction data, protocols when doing federation.
For more details on virtual federation, you can check out
design document and
documentation. An interview with
Rajeev Angal is there on developers.sun.com, which should help you to understand why virtual federation can address all challenges easily,
From the Trenches at Sun Identity, Part 4, Virtual Federation, a Pioneering Way for Exchanging Authentication Data.