You can backport and install 5.5 on it I believe, but that's not exactly out of the box. This article states that official 5.5 support for RHEL5 is beta...
Q. Can I install OEM on a virtual machine (VMware)?
A. You may install OEM in a virtual environment as long as you have a separate license for each instance of the software. It is fine to use the OEM version as long as it is properly licensed. To be clear, a separate version of software must be installed for both the “standard” and “virtual” installations.
(from http://www.microsoft.com/OEM/en/Pages/support-faq.aspx ) So you can't use the same OEM license for both the host and the guest (which makes sense), but it appears that you can use the OEM license on the guest only. I have no idea whether once installed on physical hardware if you can transfer that license to a VM. Why do they make this so confusing?
For Windows operating system software licenses acquired through the OEM channel, the Windows use rights are outlined in the Software License Terms that accompany the software. These license terms provide use rights to run Windows locally on the licensed device in a virtual operating system environment (OSE).
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