Hi,
We are thinking of offering windows vps's and are wondering what the proper license is to use on a vps? We are an SPLA member so can anyone shed some light on this please?
Thanks

Pretty sure that you just need the one server license, as windows states you can have multiple users but only one computer per license.
A VPS is simply a "user" so to speak.

If you're going to have Virtuozzo(not sure about VMWare), you'll just have to license to hardware node. If you're using Xen(or any other virtualization), you'll need a unique license for each VPS.

So if we use Xen and we need to license each instance, then we would just get a SAL per instance?

If your host OS will be Microsoft (Windows Server 2003 or 2008 Datacenter only), then you will pay processor licence. In this licence you have unlimited virtualization rights.
If host os will be Linux (Xen), then you have to pay 1 processor licence for each VPS (only Web Edition or DataCenter Edition 2008 are allowed to offer for internet projects).
So I don't recommend running Windows VPS's on Linux OS.
SAL doesn't work in this scenario.