If you can afford it, Vmware ESX is _excellent_. The remote console administration tools kick butt, and overall it's just a really stellar product.
We put essentially an entire rack on one Dell 6650 server, and have been quite happy with the results. One easy thing to do is clone existing servers; our Aolserver installations are a clone of a master redhat image, which then NFS mount the proper aolserver software. This means it takes us about 15 minutes total to set up a new virtual box with openACS running, and we get CPU, memory and disk constraints for each virtual machine from a handy web-admin page.
I'm not sure I can properly communicate how well it works in this post, but we would never go back.
