We have about half of our production SQL servers on VMWare. For the most part these are systems that are not highly transactional. I've really had no issues with them over the past couple of years. In the beginning we did have to be careful about which applications shared the same VM host. Things also got better when we began to use SAN as the disk storage medium.

One really nice plus is the ability to clone the VM to create a Dev or Test environment.