The Reg is really trying to push this virtual stuff this week, no?
"...Machines that would have turned end-of-life this year can now run a handful of virtual servers with ease and the huge savings in terms of costs of equipment"
I'm sorry - why does running a VM suddenly make a machine faster or have more capacity? The machine won't get any faster (it will actually get slower because it's now running with the overhead of the VM), and you can throw more disks at the machine to increase capacity without employing a VM.
"...Virtualisation, when handled properly can lead to some pretty amazing uptimes...bla bla ....clusters ....failover ....etc"
I can do this with an OpenBSD box running pf sync and carp, and I'm sure other OS's have similar capabilities. And my current box has been running (with OpenBSD) 24 hours a day for the last 5 years without a hitch, and that's WITHOUT any kind of failover or redundancy. "Pretty amazing uptime" is standard if you choose the correct platform.
You may have guessed, I'm still not convinced by the VM stuff. Whenever anyone talks about VM, it is usually in the same sentence as "Windows". If you are going to run critical services on something as flaky as Windows then no wonder you feel the need to cluster it all and run multiple redundant servers, even for basic stuff. As has been pointed out previously, VM seems to be mostly a sticking plaster over (almost exclusively) Windows to make the thing work with any kind of reliability. If you use a proper, reliable OS (and use appropriate chroot / jails), you simply do not need all this crap.