Basically Virtuozzo is an operating system partition which shares memory and server hardware amongst VPS's. MS Virtual Server on the other hand use a hardware parition architecture to isolate VPS's. No memory is shared and each VPS has its own OS and slice of server hardware.
You can fit more VPS's on using Virtuozzo but due to all the reported problems we have always stuck with VS 2005 and never had any problems - it is made be MS so that makes sense :).
Cheers,
Mark
System Administrator