This thing is surprising good on memory with all the VMs Im running. Heres how I have it all set up.
Base OS: Debian 6 - NFS - Samba - Linux KVM - rsnapshot - rsync - Linux RAID - SSH
VM 1: Debian 6 - MythTV master backend - Handbrake - SQL - PHP - SSH
VM 2: Debian 6 - Squeezebox Server - Firefly Media Server - Mediatomb - FLAC - LAME - Transmission Daemon - Flexget - SSH
VM 3: Debian 6 - LAMP - Squirrel Mail - Wordpress - VSFTPD - SSH
VM 4: Debian 6 - LAMP - Squirrel Mail - VSFTPD - SSH
VM 5: Debian 6 - OpenVPN - SSH
VM 6: Debian 6 - I use this one for penetration testing. I boot Backtrack Linux on my laptop, try and break in, and figure out how to fix the security vulnerabilities. This is my "teacher" VM, in that I learn about security in my attempts to hack and break in to it. Lots of fun so far.
All in all, this system seldom sees over 40% memory usage, a drop in the bucket when youre running a bunch of VMs. I chose to configure my server this way so everything would be modular. I rotate backups of my VMs through rsnapshot, each VM gets backed up twice per week. If I bork something, I can have it back up and running in a matter of minutes. All of my data stays safe this way, as nothing is saved on the VMs, its all saved to the base OS. My way of keeping the goods out of harms way