VMWare does work under Linux, and works quite well in my opinion. We (Dynu) have recently ventured into selling VPSes under VMWare, and VMWare has worked quite well with linux being the host machine. Personally, I'd suggest linux for vmware as you can easily disable any services on the host machine that you do not need, then dedicate the rest of the resources over to any VPSes you might set up.
VMWare Server works wonderfully on Linux. I've been testing it recently on CentOS 4.4, running FC4, FC5, CentOS4.x guests without any issues. The plan is to offer a VMWare based VPS in the near future. But will there be demand...
VMWare does complete hardware emulation, therefore, you may install any linux distro and have little or no problems. With centos/red hat, you should have no problems whatsoever setting it up.
Exactly what I thought.
How does VMware perform? I've heard many hosts "upgrade" from VMware to Virtuozzo, but I believe this isn't necessary. I can't see what's so great about it, and it was created by SWsoft, who created Plesk
I only have Windows based servers with VMware and they actually handle pretty well. The GUI is excellent, but slow if you control servers through it as expected.
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its great if you aren't wanting to do graphical desktops... in my experience vmware is picky about its graphics.... where as microsoft virtual PC is not so much... also microsoft has just made its virtual server software freely available....