You're half correct. Its not really the same thing, but you do misunderstand Virtuozzo.
Take a standard enterprise network. Most servers such as DC's, Exchange, Web Server (Mission Critical Stuff) is hosted on Server 2003... With VMWare you must install 4 VMWare boxes seperately on one machine. This means if you have 4gigs of RAM, you must give each box less than 1GB so not to max it out.
With Virtuozzo you can set virtual hard limits but as the resources aren't provisioned and as the OS files are used for the HD space, you have greater server density also increasing HA.
However, a VE inside Virtuozzo IS ITS OWN MACHINE... You can do what you like to the files inside of it, and if you change the system files, it will create a new real file instead of a virtual pointer to the HOST file inside the VE. Thus the end user has a Server 2003 box and has NO evidence it is virtualised.
VMWare has tried going into this market, but to be honest its higher cost, reduced performance. VMWare is the best at a quick one test machine do what you like, but for your mission critical servers, why waste resources? Why not consolidate, use OS Virtualisation, use your hardware and still have exactly the same performance....
So no Virtuozzo isn't PRIMARILY aimed at webhosting. But that is one of it's uses. There are many others inc servers inside a corporate network, and even virtual desktops with a connection broker I imagine...
Based on the information above, I am utterly confused why VMWare gets the ultra hype?