We've had our SQL Servers virtualized for a while now and 85% of our environment as a whole. There are a few that are not virtual. We really haven't seem to much performance loss from the bulk of our virtualized database servers.

We have learned however that in a virtual environment best practices are even more important. It's important to build the VM with performance in mind. 64k allocation unit sizes for volumes for sql files, etc. Its also important as a DBA to understand how your virtual platform works. Datastores in VMWare for example can take your server(s) down.