As you guess, i assume your web root directory is d:\develop\www and your site is located in subdirectory. But you could have two different place even on two different disk.
And that's all for this file. Save it and restart Apache server.

Now, we need to tell windows that when you access site2.localhost it's like you access your computer (if you don't that it will try to search on the net)..
So go edit this file c:\WINDOWS\system32\drivers\etc\hosts
and add this two line at the bottom.

Now, if your files are in the correct directory, you should open your favorite browser (mine is Firefox) and go to http://site1.localhost/ or http://site2.localhost/

You could add as many site as you want but don't forget each entry in the apache config file must have it's pair in the windows host file or you'll get a not found error.

Hope this help and let you work in real condition but at home. Think that you could name your server www.swish-db.com but you will not be able to come back on this forum (unless you remove the line in the hosts file).
And finally, the first virtualhost is the default one that is if you access http://localhost/ you will go to site1. (this work because 127.0.0.1 localhost is already present in the hosts file).

if you have any further question feel free to ask. If you found any bug, post it and i will modify this tut.

regards,
Sébastien

EDITED: some mispellings