Hardware and performance

"I would suggest splitting your first server up into 3-4 servers. Apache will distribute the load much better over 4 servers, even though they are on the same physical hardware"

A well tuned, single machine with no virtualisation will significantly outperform an VM-based setup. Yes, you do need to tune the machine.

VMs are for when youare prepared to trade performance for something else -- usually isolation/segregation of tasks.

Also see my recent comments about latency as soon as you split off the DB server."

Is that speculation or practice? Because based on practice that is not the case. Not saying you should virtualize in every case, but you do have tools that enable you to have more grandular control such as some QoS and hardware on demand. Now of course, I am talking about true bare metal hypervisors like vmware ESX.

It's true that 1 vs 1 the bare metals server will outperform a virtualized server, but a 1 vs 2 to 1 vs 3, well with ample load this is just not the case. There alot of ifs here, like assuming it's a modern quad+ core ect. Plus with virtlization if you are getting heavy I/Os then you can easily remedy this by adding additional network storage. The path to scaling goes up with simpler effort.

However, with 1 physical server then I can come to an agreement that it may not be the best option, though you should consider it depending on your path.