Should VMSes Run On A Virtual Machine?

I have run the Milestone Management Application on virtual servers with great success and don't know any reason not to do this if the server is being hosted local to the cameras/viewing clients.

Never used a virtual machine for client viewing station though and can image it would be very challenging due to the graphics processing requirements. To display more than 10 cameras at once you simply need more graphics/processing power than standard thin client hardware can provide. Mostly virtual environments are only available in large enterprise applications and the VM's are being hosted remotely which  means you need substantial bandwidth to a location for viewing video.

It's very common to run a VMS on a virtual server these days. Maybe 8-10 years ago, it was a different story. Back then, hypervisors we're less performant and even more untrusted. These days most people don't think twice. As long as the underlying hardware meets the requirements and the hypervisor enables you to access those resources in full (I believe free/cheap hypervisors limit vCPUs or RAM), you should be fine.

As for pros/cons...

Pros

-Portability, high availability, CPU/RAM resource sharing, snapshots/recovery, cloud-ready

Cons

-Some resource loss for hypervisor (minimal), VMS is disk heavy, so many VMs on the same hardware COULD lead to contention, added cost for hypervisor licensing if applicable, added maintenance/complexity

For most commercial systems there is little reason not to virtualize IMO. There is actually a big benefit for mobile server users of Milestone to use bare metal - if your server CPU is an Intel processor with quick sync video support, the Mobile Server will use hardware acceleration to transcode video for mobile and web clients. I don't think this can be done in a VM just yet (please correct me if I'm wrong).