In my opinion it always comes down to the fact that shelling out some money for a good product always beats trying to stuff around with a "free" one that's hard to configure and maintain. I run 4 ESX farms, and have NO problem rolling out virtually any type of server from Oracle/RHEL, to Win2k3/2k8, and everything inbetween. I simply make sure I allocate enough resources, and NEVER over commit. I did a cost analysis ages back trying to convince management we needed to go down the virtualisation path to guarantee business continuity.
In the end it took the failure of our most critical CRM server crashing and me importing an Acronis backup of it into ESX that convinced them beyond a shadow of a doubt.
I would say to anyone, something for $15-20K that gives:
Fault-tolerance
Fail-over
Easy server roll-outs
Simple network re-configuration
Almost instant recoverability of machines
Is more than worth the cost! The true cost of NOT doing it can be the end of a business, or as I have seen, several days of data/productivity lost!
Performance issues? Reliability issues? I have none at all, the only times i've had issues are poorly developed .NET apps, IIS, etc, which I then dump the stats and give them to the developers to get them to clean up their own code. And more than once I've had to restore an entire server because someones scripts deleted or screwed entire data structures, and in a case like that, being able to restore a 120GB virtual in around 30mins from the comfort of my desk or home really beats locating tapes, cataloging them, restoring, etc, etc.
I have Fibre SAN's (with a mix of F/C, SAS, and SATA disks) and switches, so the SAN just shrugs off any attempt to I/O bind it! The only limitation I can think of is the 4 virtual NIC's, it would be good for some of our products to be able to provide a much higher number.
No comparison in my opinion.