VMware ESX 4.0 Update 1 and Later and vCenter Server 4.0 Update 1 and Later

vSphere Resource Management Guide : Managing Memory Resources

Managing Memory Resources
All modern operating systems provide support for virtual memory, allowing software to use more memory than the machine physically has. Similarly, the ESX/ESXi hypervisor provides support for overcommitting virtual machine memory, where the amount of guest memory configured for all virtual machines might be larger than the amount of physical host memory.
If you intend to use memory virtualization, you should understand how ESX/ESXi hosts allocate, tax, and reclaim memory. Also, you need to be aware of the memory overhead incurred by virtual machines.