Virtualization, WmWare licensing

For windows and IIS limitations I am thinking about Virtualization for the web servers in our farm. So maybe we can use with better efficiency. With latest Quad core cpus it will be interesting to use 4 windows installation in one server.
 
What will happen when I use 1 physical server and 4 web server installs ?
 
Wmware can be useful because of they all using same ram pool, cpu pool and I don't have to get a load balancer to balance well and it is more secure because one server goes down because of software problems another one getting place to handle because they have all different ip's.

License wise, since you are installing the software on 4 different places (be it a virtual or physical), you need a license each.

ASPPlayground.NET
~ see our Version 4 plans here

But they are the same windows installations in the same server. I can make a big one windows but it will be less secure iis will be more problematic. So we are both losing.

maybe I understand it wrong, but don't the 4 virtual servers have to be running and serving contents at the same time?

ASPPlayground.NET
~ see our Version 4 plans here

Yes they are serving the same content and for the network they seem to all differnt hardware but actually they are same but some one being problematic system disables and swithes to other ones.
 
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Even microsoft adopts Virtualization and they give away a free product "Microsoft Virtual Server 2005 R2", works with Windows Server 2003.
http://www.microsoft.com/windowsserversystem/virtualserver/default.mspx