So it looks like Microsoft is finally providing support for virtualization products. I have included some links specific to VMware since I had to perform some research for a client.
This link from Microsoft: http://support.microsoft.com/kb/909840 states that "In addition to the Microsoft hardware virtualization software products, support for third-party hypervisor technology is supported for hypervisor technologies that are certified by Microsoft through the Server Virtualization Validation Program (SVVP)".
This link from VMware: http://www.vmware.com/solutions/whitepapers/new_msoft_policies.html states that VMware is SVVP certified as of August 2008.
This link from Microsoft: http://support.microsoft.com/kb/957006 states that "Microsoft Office SharePoint Server 2007 Service Pack 1 and later versions are supported" in virtualized environments.
This link from Microsoft: http://support.microsoft.com/kb/944987/ states that Microsoft and VMware have established a joint support relationship (although they do not guarantee performance).
And one more for good measure: http://www.microsoft.com/presspass/press/2008/aug08/08-19EasyPathPR.mspx