We're going to be consolidating many servers to virtual servers in the upcoming months, and will be looking for a good backup solution for them. Would definitely prefer to stay with our already large investment in Retrospect, which has worked well over the years.
Virtual Server (and the upcoming Hyper-V) has a nice VSS writer for taking complete and incremental backups of Virtual Machines (including configuration, system state, and hard disks), but right now MS DPM 2007 is the only product that actually uses it.
Backing up the VHDs is of course impractical due to their size and inability to perform incremental backups, and running the backup agent inside of each Virtual Host is at best a clumsy solution.
Would definitely pay $$$ for an add-on that supports Virtual Server's VSS writer, much like Exchange, SQL, etc.