> I did see other forum discussions where very large installations were being done in a virtual environment.
Could you mention the threads?
> Any advice from the pros would be helpful.
The pros have spoken about the cons in the past http://moodle.org/mod/forum/discuss.php?d=145091
But the choice not something which you can't change later. If the need arises, migrating a Moodle installation is simple task.