Container-style approach is very popular in the webhosting industry. It's especially useful for folks that are doing variations on the 'Linux + Apache + MySQL + PHP' theme. Like using postgresql or Ruby or whatever, sinec it's difficult to find places that support that sort of thing.
Or if they want to run other types of services, like email or whatever.
People will run hundreds of virtual Linux systems on a single computer. They tend to be quite a bit cheaper then a full Xen-based environment..