It's interesting that nobody so far mentioned openVZ or its commercial version, Virtuozzo. It's different than all major virtualization players (it's OS level virtualization, not hw level), but that makes it the only viable option for things like mass web hosting solutions.
Try it out and see if it fits your requirements.
The two things that always comes to mind when I am considering a virtualization solution is extent of tool set/support, and the general acceptance of the technology. For those two reasons I nearly always implement VMware, it has a mature set of tools, a wide range of functionality, and sits at a very manageable price point. No true open source solution really comes close, you can approximate parts of it, but in the end it turns into a support issue that can pose a significant headache.