Additionally, when running Virtual Server 2005 R2 (which is now available), you now only need to purchase licenses for virtual machines which are actually running. So if you have eight machines configured, but only four ever run at once, you only need to cover those four licenses. In the past, each of those four licenses needed to cover the number of CPU sockets in the host machine: If the Virtual Server box had four sockets, each virtual machine needed a four-socket license. Now, virtual machine licenses only need to be for the number of virtual CPUs assigned to that virtual machine, regardless of how many sockets the underlying physical hardware sports.

What I bet you're going to see someday is something built into Virtual Server (and maybe even Virtual PC) to help you manage this: You tell it how many licenses you own for various Windows versions, and it'll help you keep track of how many are running, possibly warning you if you're running virtual machines that don't have an available license. Regardless, these new, more lenient licensing terms are a huge boon for server consolidation efforts.