Just thought of another way to put it... I personally view VM technology as optimum when the O/S is merely an interface.

For example, it is great in dev-test environments, where testing against multiple systems and platforms is needed.

It is great for small web-hosting instances too, where each instance can have 'root-like" access to their own instance.

It is still not great for databases (especially large implementations), nor integration, report, and analysis servers.