Andrew Dugdell did a great job summarizing all Support articles describing Microsoft policy about virtualization:

• Microsoft Virtual Server support policy
• Supported operating systems in Virtual Server 2005
• Support policy for Exchange Server 2003 running on hardware virtualization software
• Support policy for Microsoft software running in non-Microsoft hardware virtualization software
• Windows Server System software not supported within a Microsoft Virtual Server environment
• Virtual machines support in Microsoft Operation Manager (MOM) 2005

New article about virtualization support from me:

• Third-party guest operating systems that are supported for use with Virtual Server 2005 R2