Dave thinks so:
It calls out a bunch on "new features" that we have either been doing for ages, or have announced that we will have in Windows Server Virtualisation (WSV), when we ship Windows Server 2008 - I'm confused (seems like someone is trying to introduce a load of FUD - Fear, Uncertainty and Doubt).
They call out 64GB virtual machines and 128GB physical machines. We'll do 64GB virtual machines with WSV and 64-bit Windows will work with systems with up to 1 Terabyte of physical memory. The reason for this, if you're interested is that our hypervisor is 64-bit and ESX is still 32-bit.
They call out support for virtualisation-aware (para-virtualised) Linux operating systems. We are working with both Novell and XenSource, so we'll do that too (we already support both RedHat and SUSE Linux on Virtual Server).