Running TS on a virtualization layer can work, but it also can be a huge problem. It al depends on the hardware you use, the applications that are running on top of them and the usage of this applications. A good preparation (understand the hardware, the apps and your users) will help in the final decision. Also if you make calculations try to keep virtual server with 1 VCPU. It is better to use two virtual servers with 1 VCPU than to use 1 virtual server with 2 VPCU (you can host more sessions).

What i've seen is terminal servers on physical boxes with exact copy's of the physical servers to virtuals. So the testing could occur on the virtuals (with snapshotting etc. this is a great testing environment) and the actually work was done on the physical hardware.

Also i've seen calculations of prices, that showed virtualization was cheaper with TS then on physical boxes (Vmware ESX was very cheap in this company because of discounts for educational customers) for the same amount of users and resources (1 physical server for 50 users against 2 virtual servers for 25 users).

I can imagine that virtualization of your terminal environment can give you benefits like DRS/HA, vmotion. And of course fast deployment of extra terminal servers (for extra capacity or testing purposes), which physical can't. But with bladeservers and scripting you can come a long way to achieve this same benefits.

Conclusion it al depends on your environment....