Re: Can Microsoft Dynamics SL be virtualized? What does Microsoft support / not support?
Yes, definitely, Dynamics SL 7.0 can run fine on a Hyper-V VM. We lost a physical server last year and replaced it with a 64-bit machine running Windows Server 2008 R2. Then we set up a Hyper-V virtual machine running Windows Server 2003 R2 to host Dynamics SL 7.0 SP1 (on SQL Server 2005).
This was easy to get set up (<1 day).
Just be sure to have adequate processing power and memory set up on the VM to handle the size and usage of your Dynamics SL installation.
The only tedious thing in our case was getting the new server name set correctly everywhere it occurs in Dynamics SL (including all of the clients), and associated 'ownership' synchronization issues after migrating the saved databases to the new instance of SQL server. (~1 day) Some of this effort would not be necessary if you can keep the same server name for the VM as for the old physical machine.