A little known fact is that Virtual Server 2005 installs and works just fine on Windows Server 2008 core installations. All you need to do is to select to do a custom installation, uncheck the option for the Virtual Server Web Application and complete the installation. You will then get an installation of Virtual Server that you can manage using the COM interface or using a remote installation of the Virtual Server Web Application:

Note:  Windows Server 2008 is still a prerelease platform - this is not an officially supported configuration.

Source:→ MSDN Blog

Microsoft, Windows Server 2008, Virtual Server 2005, Virtualization, Tips and Tricks, Knowledgebase