What are good resources to do hands-on practice on network penetration testing?

Check out the following:

• Metasploitable - The Metasploitable virtual machine is an intentionally vulnerable version of Ubuntu Linux designed for testing security tools and demonstrating common vulnerabilities.
• Metasploitable 2 - The Metasploitable virtual machine version 2.
• Damn Vulnerable Linux - Damn Vulnerable Linux (DVL) is a Slackware and Slax-based live DVD. The distribution, purposefully stuffed with broken, ill-configured, outdated and exploitable software.

Edit: Fixed url to Metasploitable

Check out https://www.hacking-lab.com. They have a distro setup for the challenges they run

Good sources of info http://www.ethicalhacker.net and Security Tube

If you want resources to work on at home then download Kali Linux (install it, don't run it as a vm or cd/usb iso), Damn Vulnerable Linux, Damn Vulnerable Web App, VM-Ware/ Virtuabox and dig out a copy of XP.

As a minimum, you need to learn how to use NMap, Wireshark & Metasploit though you can cheat a little with Metasploit and use Armitage instead.

If I can find any further good links tonight, i'll post them.