This can be done today using kvm's memory ballooning. Essentially, you install a driver in the guest VM and it takes care of (1) reclaiming RAM from the guest O

This can be done today using kvm's memory ballooning. Essentially, you install a driver in the guest VM and it takes care of (1) reclaiming RAM from the guest OS when the host OS needs more; and (2) providing more RAM to the guest if needed and available.