This is mostly true .. in newer versions of Xen there is options for PCI passthrough, where it maps the physical device to a specific VM. So it is possible, but not very easy, and I wouldn't count on it not taking the whole box down if something went wrong.
True, but this is hardly a workable solution since any PCI drivers can fail in the VM for a number of reasons with this. The Amazon EC2 cloud (which runs a modified Xen) offers physical machines, not VMs, for GPU cluster rental (see http://aws.amazon.com/ec2/instance-types/
). If there was a way to slice GPU power within VMs, I would think Amazon would have done that.
Looks like I have to run my VM's on the mining OS then.
Yes indeed, in fact I've done it and it works fine. Since GPU mining does not really impact the CPU and the memory, I have set up a machine running Ubuntu, a miner and VMWare player with my Windows Server as a VM (before the whole physical machine was dedicated to the Windows Server).