Hi Bob,
I think performance on Virtual Machines can vary a lot. Some hosts may be putting more VMs on a given hardware than others. Even if they guarantee you x amount of RAM, performance problems can occur if there is not enough available processing power due to too many VMs running at once.
Some hosts are better than others, I had a customer running on a Win 2003 VM with 500MB of RAM from Apollo hosting and it seemed to work pretty well but was rather expensive, they have since moved to shared hosting and are just as happy with performance. I ran a VM with the same specs from 1and1.com for a while, it was less expensive than the Apollo one but it seemed less performant. When I ran 3 mojoPortal installations on it it began to have troubles with not enough RAM, but then I was running both MS SQL and MySql on it.
Currently this site and a number of others are hosted on a dedicated server from 1and1.com with Win2003 and 1 GB RAM and performance has been very snappy for all the sites, though every now and then I get a sluggish moment that I think is happening when it creates recovery points for backup. Again, this machine is running both MS SQL Express and MySql in addition to IIS.
I think the vast majority of people are using mojoPortal in shared hosting, going to a VM can give you more control but not always a big improvement in performance, a dedicated server will definitely give much better performance that you will notice and more headroom for running additional installations.
Hope it helps,
Joe