Guido Grillenmeier of HP and I put on an all-day Active Directory Disaster Recovery workshop for about 150 people at DEC 2006 this year, and the key component of the supporting infrastructure was Microsoft Virtual Server 2005 R2.
The 150 people were divided up into 36 groups of four (roughly), and we provided each group a virtual environment consisting of a single AD forest with two domains, and two DCs in each domain, for a total of 144 virtual server sessions. We ran these on 6 dual-proc AMD x64 servers with 16GB of memory each, and 4 80GB SATA drives. For those of you who are artihmetically challenged, this works out to 24 VS sessions per box.
Generally the sessions weren't too busy, and people simply had to run ADUC, LDP, ADSIEdit, and NTDUTIL to do all of the exercises in the lab. The non-authoritative restore from a disk-based backup was probably the most taxing operation from a system resources point of view.
When I first configured the test server, I had a single drive for all the virtual images. Running more than 4 or 5 images pegged the disk utilization and the disk queues were up around 50 or 60 (!). Needless to say, performance in that scenario sucked. I then added more drives, for a total of 4