SQL Server 2005 supportability on virtual environment
Virtualization and Consolidation is still a hot topic and revising SQL Server consolidation and virtualization - hot topic in the industry related post here that you can easily manage the resources by using virtual machine technology that enables multiple operating systems to run on a single computer at the same time.
I believe there might be many installations (production) are managed on Virtual Environment to cut down the costs, then it comes to the important factor of suportability to the software and operating system. In this regard it is very important to know the supportability options from Microsoft on SQL Server 2005 version, it is a coincedence that I have been looking for similar information on KBA and found this KBA 956262 that clarifies:
Because we have not tested Microsoft SQL Server 2005 to run in a virtual machine (VM) environment, we only provide commercially reasonable support for SQL Server 2005 running in a VM environment. Commercially reasonable support is defined as all reasonable support efforts by Microsoft Customer Support Services (CSS) that do not require code fixes for SQL Server 2005.
Say if you have problems within your SQL Server environment that is running on a Virtual environment the intial response from CSS will be to reproduce the same problem on a physical environment, which means you must have like to like software & hardware version to ensure the support or fix from Microsoft support. If you can reproduce the entire problem on the physical environment then your problem will be eligible as a bug for a hotfix.
So make sure to maintain physical enviornment just in case if you need to reproduce the problematic situation within your SQL Server environment that might occur without any notice.