Virtualization is no silver bullet

Beware of the salesman touting the virtual machine as the cure-all for all kinds of data center issues. There are certainly advantages to the technology, especially for managing server proliferation for small-scale solutions. But when it comes to enterprise class applications, virtualization will only bring on a slew of different problems, such as unpredictable performance, capacity ownership and planning, and maintenance planning. For instance, when you have multiple applications sharing the same physical machine, it means that taking one piece of hardware down for maintenance could easily affect multiple customer groups. Again, for small apps, it's probably not a big deal. But the larger solutions carry higher stakes, and it becomes a big deal pretty quickly.

Here is another angle on virtualization, focused on policies and security.
Time To Halt Runaway VM Sprawl