The typical x86 rack server's characteristics reflect the requirements of Windows Server. Microsoft's big OS has always been designed under the presumption that it will have a full physical server to itself.
In Windows Server 2008, Microsoft delivers a 64-bit server OS with a smaller minimum resource footprint than Windows Vista. It varies by edition; Windows Server 2008 Datacenter doesn't focus so much on shedding the pounds, but it, too, picks up the speed benefits from the slimmer Server Core, which was created to be a practically weightless virtualised guest OS. IT shops are likely to use Windows Server 2008 the same way they use Windows Server 2003 now, only now they can run lots of independent virtual Windows Servers that scale in features and footprint across a broad range of options.
Windows Server 2008 remains a component of the Windows Server System, so Microsoft has not instituted a free lunch programme. Functions like email and collaboration, database, and robust edge services are add-ons that most deployments will require. But these can be placed at the host level, with virtualised guests distributing applications and services that use Windows Server components. In other words, one license of Exchange Server or SQL Server will stretch further than ever before.
How low it can go I spent most of my time testing Windows Server 2008 Enterprise on an eight-core, two-socket AMD Barcelona reference server. When you align the features of the Barcelona architecture with Windows Server 2008's capabilities, you come away with the impression that AMD designed its CPU with Windows Server 2008 in mind. Having talked with Barcelona's architects, I'll bend nondisclosure just enough to say that to call Barcelona a Windows Server 2008 hardware architecture is not far-fetched.
Windows Server 2008 is built for virtualisation. All SKUs up to Datacenter are tooled for what you might call "buffet" scalability. You can choose, with finer granularity than is possible under Windows Server 2003, the server features you want to run, where you want to run them, and what portion of total resources are dedicated to them. For example, Internet Information Services (IIS) 7.0 has split Web application services functionality into some 40 independently loadable plug-ins. It is similar in concept to Apache's modular approach, but IIS's approach is safer, more transparent, and much easier to manage. This is a nice fit for server roles, a feature introduced in Windows Server 2003 that provides simple on/off switches and wizards that bring up and shut down groups of services according to need.
Windows Server 2008 continues Windows Server's tradition of server roles, but adds finer-grained, modular control over individual features. You can still do a blunderbuss deployment in which a Windows Server host or guest role is "all," but it is well worth IT managers' and administrators' time to learn to match server roles, and modular services within those roles, to user and application requirements. Do that, and you'll have servers that will make physical-to-virtual transitions and virtual machine relocation uncommonly easy.