I have a 3GB dual core machine here running Linux as the Host OS (no reason it couldn't be Windows, though) and we run 3 VMs 24/7. One is our backup machine, another is one of our shared hosting machines, and the last is a mointoring VM.
Probably the hardest part to grok is VMWare networking. Once you have a handle on how networks are bridged to physical NICs, life gets easier.
And no this machine I'm talking about isn't part of the Hosting Puppy infrastructure
Lastly, pay attention to the VMWare Server licensing. The different flavours of server have different licensing provisions. The free one, for example, prohibits selling VMWare space or services hosted in VMWare. Just an example...may not apply to you.