Virtualization of CRM 4.0 Supported
Microsoft recently published a KB article that explains that CRM 4.0 will be supported to run under Virtual Server. Read the details here.
The key points of the KB are as follows:
- CRM 4.0 will be supported to run on Virtual Server 2005
- Future versions will continue supporting virtualization so it's not a dead end...
The KB has a number of good links to virtualization resources and some good Performance and scalability considerations section.
The one thing that probably isn't highlighted enough is around SQL Server. If you virtualize your CRM Server I would highly consider keeping your SQL server still on a physical server. SQL on a VM is good for test and development but current VM technology doesn't do well with real I/O intense applications like SQL Server.

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