VMWare Fusion 2.0 beta 2 is out and it lets you run Mac OS X Server (not client) in a virtual machine. It took some work, but I finally maaged to get it working.
Although I don’t have a Server license, Apple makes it available to Apple Developer Connection members, so I was able to download the disk image from the ADC member site.
If you try to install directly from the Leopard Server DVD image, you’ll find that VMWare doesn’t let you choose a .dmg file. To get around that, open the image in Disk Utility and convert to DVD/CDR Master. VMWare will then let you install from the resulting .cdr image.
If you try to use the default settings for the virtual machine, the installation will fail. VMWare has posted instructions for successfully installing Mac OS X Server. The important thing is to customize the VM settings, remove the IDE hard drive and add a 30GB SCSI hard drive.
When you start the installation, the installer won’t find any drives to install the operating system, so you’ll have to open Disk Utility in the VM and erase the virtual drive. Once you do that, the installation will proceed smoothly.