Virtualization is really good for consolidating old servers onto one bigger ones. The problem however is that is the big server dies to whatever reason instead of having one small problem you end up with 10 or more small problems and usually ten small problems in a production environment is basically a big problem.
So the missing component is clustering - if you could somehow make a cluster and virtualization work together... well, you can do it for Solaris Zones for quite some times and it works really good. But what about Xen (aka xVM Server) based virtualization? There is a project called ha-xvm which is to provide a Solaris Cluster Agent to do exactly that. See a demo showing that it actually works :) And yes, it does include live migration when switching virtual server to other node.