illumos has very powerful virtualization for network with crossbow, storage with ZFS and workloads with zones. Using these technologies together with XEN (xVM) in OpenSolaris had several synergies and allowed virtualization of other operating systems than Solaris. That project was sadly abandoned even before Oracle closed the OpenSolaris source.
Joyent are however developing KVM for illumos that could fill the gap. Signs of the implementation have can now be found in the illumos source and more in the Joyent branch which has a KDM brand for zones.
Bryan Cantrill will hold a presentation at KVM forum 2011 today named "Experiences porting KVM to SmartOS" (SmartOS is based on illumos) and he had a KVM related post on his blog a few days ago that was protected by a password. I'm sure more information will be available in the coming weeks.
Bryan have now posted the KVM entry in his blog publicly: KVM on illumos, the source is also available and there are SmartOS live images to try. I will post write another post when I get a spare hour to look at all this.
Feature #1362 add kvmstat for monitoring of KVM statistics
KVM Forum 2011
[HVM-556] add cores dataset to kvm brand zones and size based on VM RAM.
Assessing software engineering candidates
5 weeks ago