apparently you can't kick a recent red hat/centos without at least 512MB allocated to the vm, or you get nonsensical errors that don't indicate the problem.
also, the world of virtualization is very confusing. all these different types of vm's with different implementations and different limitations, and no real simple guide on how their actual use relates to one another, and when you need one thing or another. esxi isn't really free since you have to pay for a tool to configure it. their only linux support tool can't actually change any settings, you have to pay for esx to get that. (sure you can unlock the hidden ssh daemon and import an existing vm, but then you have to create all your vm's on your own machine? thats kinda retarded)
xen looks like the best bet for a free cluster of VM's, next to that openvz. i'm still trying to figure out how they work on a low level but all in all it seems you have to use a customized patched kernel and using the kernel you want to use or the patches you want may be quite difficult if not impossible.