It appears that we are on the same page or at least the same chapter. Currently, We do mix certain services on the same box, but we are also moving more and more of the services into their own distinct space and we do realize that VMs need more resources especially dealing with I/O.
But the move by the big chip makers into multi-core as a way to enhance performance directly affects where we decide to use VMs. VMs perform nicely in a multi-core environment. VMs are especially nice to use when you have end users that need a multi OS environment. Why buy 3 systems with 3 OSes when that can be virtualized? We choose VM.
"Personally I've always believed that for a system to exhibit quality engineering form must always follow function, however I think with the latest "Hype" a lot of IT shops are practicing the reverse"
I am not sure VMs are really hype, if that is what you are referring to. As you stated, this technology has been around a long time and it is just now becoming mainstream. I believe that this is the DIRECT effect of chip makers moving into multi-core processors. Would I run a VM on a single processor 512Mbyte system? No. But I would definitely run them on a double core 1Gig system. So five years ago, I say no, but today I say yes. This is why the "hype" exists. It is feasible. Correct?
Are we trying to hash out whether VMs should be used?
Well I am not sure where this is going or what we are really trying to figure out, but lets say that, at least, it was a above average discussion considering this is a yahoo stock board.