This really interesting white paper was published just over a week ago. It describes how Virtual Server 2005 is being used by Microsoft IT almost in a "commodity" capacity. Virtual Server 2005 provided Microsoft with the means to take consolidation to the logical level. The Virtual Server Utility team assumed responsibility for deployment. Internal customers were recruited for the pilot, with aggressive SLA metrics as compelling incentives. I saw a much earlier draft of this document with outlining some of the expectation settings, but I'm staggered to see the end results which are quite astonishing. Rather than giving you the result directly, read for yourself here.
one thing is that most ms shops expect is to have a 1:1 ratio for lob's. I think thats nuts and should be addressed not by vs2005 but by an educational effort on ms's part. I don't think a 1:1 on a typical server is required. Also since your picking the lowest hanging fruit for you server consolidation I'm sure those lob's would work just fine on a non vs'ed server.
ah heck I can't even begin to think of issues that I have with vs2005..