The overhead of a hypervisor is pretty low. VPS hosts will divide a 16GB 4-8 core machine into 40 pieces with Xen and each slice performs pretty well (provided

The overhead of a hypervisor is pretty low. VPS hosts will divide a 16GB 4-8 core machine into 40 pieces with Xen and each slice performs pretty well (provided that not all of them are running CPU intensive jobs at once. The main overhead is that each virtual machine has its own kernel memory, file cache, etc. There are other virtualization approaches that use a shared kernel, and which may be able to use a single copy of common shared libraries across partitions (not sure about this last part though). FreeBSD jails or OpenVZ on Linux fall into this category.