Testing Web Services

Hi all,
I am new to web services and am task to do some research on this area. The thing that came to my mind was the test environment. Supposing if i wrote the code for accepting data or information via web services for my site from other sites(my site being the sink and another site being the source), how can i simulate this when i test on my local PC when i have no designated site to extrapolate the service from?

Is there some sort of software or pseudo server that i can install on my local PC to simulate such a "source site"? Thanks alot in advance!

Cheers,
WM