We introduce spatially-aware virtual workspaces for the mobile environment. The notion of virtual workspaces was initially conceived to alleviate mental workload in desktop environments with limited display real-estate. Using spatial properties of mobile devices, we translate this approach and illustrate that mobile virtual workspaces greatly improve task performance for mobile devices. In a first study, we compare our spatially-aware prototype (mSpaces) to existing context switching methods for navigating amongst multiple tasks in the mobile environment. We show that users are faster, make more accurate decisions and require less mental and physical effort when using spatially-aware prototypes. We furthermore prototype pSpaces and m+pSpaces, two spatially-aware systems equipped with pico-projectors as auxiliary displays to provide dual-display capability to the handheld device. A final study reveals advantages of each of the different configurations and functionalities when comparing all three prototypes. Drawing on these findings, we identify design considerations to create, manipulate and manage spatially-aware virtual workspaces in the mobile environment.