Dynamic Memory is a Hyper-V feature that was in a few of the Server 2008 R2 betas, but was pulled from RTM. It's a feature that VMWare ESXi has had for a few months, so MS is essentially playing catchup here. It essentially allows you to allocate more RAM to VMs than you physically have installed in the host. MS claims their solution is different but the end result is the same -- ability to host more VMs on a given hardware configuration. The new features in SP1 are geared toward virtualizing desktops in the datacenter, and is telling. The shift in focus from consolidating server OSes & increasing server density in the datacenter to thin clients & virtualized desktops hosted in the datacenter seems to indicate Microsoft has given up on going after the former.