Standalone server is definitely better. However, it's not out of the
question to run the HQ server in a VM. Performance is obviously a big
concern, however, we would probably recommend running a standalone
database server somewhere where performance can be guaranteed. Other
than that, we have found VMs to have significant time drifts, which
would cause a problem with accuracy and display. As long as you can
do something to make sure the server is properly NTP time sync'ed
constantly, then you should be ok. We already distribute the HQ
server in a VM image for people to try out HQ. Hope this helps.
Charles