Microsoft Virtual Server R2 SP Beta works really well on Vista x64 and Intel Core 2 Duo E6300 CPU, which has Virtualization support. Installer was not completely hands-off - I had to add CGI module to IIS7 manually - otherwise VSWebApp.exe was treated as downloadable file and not as CGI module. MS needs to update VS installer to automate this step.
Please note that although MS Virtual Server R2 Beta can run on Vista x64, it can't host 64-bit OSes. To host 64 bit OSes you would need free VmWare Server installed on x64 Windows 2003 Server, and either AMD 64 bit CPU or Intel EMT64 CPU with Virtualization Technology (VT) support (like Core 2 Duo E6300 or E6400 CPUs).