The IT department where I work is trying to move to 100% virtualized servers, with all the data stored on a SAN. They haven\'t done it yet, but the plan eventually calls for mo
SQL Server is supported in a virtual environment. In fact I would recommend it seeing that one of the licensing options is per socket. This means you can put as many SQL Server instances in a virtualized (e.g. Windows 2008 Server Datacenter) system as you like and pay only per processor socket the machine has.
It's better than that because DataCenter is licensed per socket with unlimited Virtual machine licenses as well.
I'd recommend clustering your Hyper-V on two machines however so that if one fails the other can pick up the slack.