This is pretty cool. Watch the 3 1/2 minute video from the link below.
Memory compression – This brings more efficiency out of the hardware. Since memory is normally the bottleneck on VM’s with this new technology they can insert themselves between the virtual machine and the RAM and compress some of the pages before they go to swap. Up to 25% more VM’s can run on the same amount of memory. They also introduced storage I/O control for cloud solutions for storage.
Steve Herrod, VMware's CTO, Introduces VMware vSphere 4.1 - NTPRO.NL - Eric Sloof
This kind of innovation is why VMware stays the leader and Citrix, Microsoft and others try to keep up:)