From Network World, “Virtual appliances cure appliance bloat”. The article outlines some solid benefits to virtual appliances from the perspective of the enterprise.
* Streamlined product evaluations: Instead of waiting to get hardware in-house for evaluation, you can download a trial virtual appliance and begin using it in a matter of hours without having to interact with the vendor or reseller.
* Simpler, more powerful lab environments: Virtual appliances make it easy to set up multiple appliances on a single server for testing purposes. You can try new products and modules, test configuration changes and evaluate different server configurations. You also can take a snapshot of your production environment and run it in a lab environment. Applying patches and upgrades can be performed at low cost in the lab environment on an identical snapshot of your production system.
* Lower capital expenditures: Virtual appliances can save thousands of dollars on initial purchase price vs. hardware appliances, and thousands more by utilizing existing data center failover and disaster recovery resources. But make sure your virtual appliance vendor has a virtualization-friendly pricing model that is tied to number of users, for example, rather than number of CPUs (which makes little sense when you can instantiate any number of virtual appliances dynamically).
* Increased performance and agility: Though there may be a small performance hit in running a virtual appliance on hardware that is otherwise identical to a vendor’s hardware appliance platform, most servers used in virtual environments are more powerful than a single special-purpose appliance. So in practice, virtual appliances can offer superior performance in a cost-effective way.
Virtualization and Virtual Appliance news, tips and opinions. 

Could not agree more. We have moved from a hardware model to a software model. You can download the .iso or the vmware image. We have seen a lot more downloads of the VMware image - even though you could build the iso in VMware
. Testing in a virtual environment is much, much easier thanks to snapshots, etc.